- Toyota expects Thai vehicle sales to drop 9 percent in 2016
- Company says Thai car demand may recover in two years
China’s economic slowdown is affecting its Asian neighbors and hitting vehicle sales in Thailand, with Toyota Motor Corp. expecting industry demand to fall for a fourth straight year.
Industry auto sales will decline 9 percent to 720,000 units this year, Kyoichi Tanada, president of Toyota’s Thai unit, told reporters in Bangkok on Thursday. The prediction is gloomier than estimates by consulting firm Frost & Sullivan, which recently forecast vehicle sales will drop 1.3 percent to 780,000 units on weak consumer spending, challenges in the exports sector and global economic volatility.
Toyota’s estimate for 2016, representing about half of the industry’s sales peak in 2012, underlines the challenges that the Southeast Asian country faces amid a slowdown in China, the largest trading partner for most nations in the region. Sales of Toyota, also the biggest carmaker in Thailand, fell 9 percent in 2015, extending a three-year slump after the country ended subsidies for first-time car buyers, said Tanada.
“We have to admit that the world economy is very weak, especially the Chinese economy,” said Tanada. “The Chinese economic slowdown has really affected the growth of countries including Thailand. Low prices of farm products such as rice and rubber have also affected the incomes of consumers.”
Toyota, Honda Motor Co. and Nissan Motor Co. halted production for months in 2011 after the worst floods to inundate Thailand in half a century disrupted the supply of parts. Their sales rebounded in 2012 and 2013 on pent-up demand and government subsidies, but have since declined with the expiration of the incentives. Japanese carmakers are increasingly looking to Indonesia and Philippines to expand their production and sales networks in Southeast Asia.