PPVs Show Brighter Prospects than the Whole Industry in 2016(Current Issue No. 2764 Full Ed.)

KResearch is not optimistic about the auto industry in 2016, whether at home and elsewhere, believing that it will remain a tough time for sales. It is projected that sales in Thailand will shrink 4.0 to 7.0 percent, equivalent to sales of 740,000-770,000 units this year. They will likely pick up in 2H16, but remain in contraction relative to a high 2015 base. Despite that, brighter prospects are expected for exports ahead wherein we foresee a steady market, or growth as much as 4 percent later, which would mean sales of 1,210,000-1,250,000 units. Export performance will likely be at risk in 2H16, particularly to the Middle East, not to mention the effect of a high 2015 base, limiting export growth there. That said, there could be an exception in pick-up passenger vehicles (PPV) that have sold well in domestic and international markets this year.
PPVs have become a popular choice among SUVs which are designed to support various use under difficult road conditions. Facelifts and new models have also been other reasons why PPVs are now making the highest sales in the Thai market. However, given high 2H15 base – as a result of a sharp sales uptick before a new excise tax rate was enforced – chances are that 2H16 sales of PPVs may contract while the whole-year sales may not surpass that of last year at 69,062 units.

A similar upsurge will also likely be seen in PPV exports, thanks to launches of new models, shifting buyer preferences in cars and cheaper fuel prices. Reversing the market trend, exports of PPVs are projected to skyrocket 92 percent, with Oceania and Asia as major destinations.