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BANGKOK : Business at Somboon Lertvitworawat's garment factory has fallen sharply since the military coup six months ago but he's still buying a third pick-up truck for his company here at Asia's second-biggest auto show.
"Thirty percent of my business has disappeared since the coup and the economy is not good," Somboon said as he prepared to sign a deal on a 720,000-baht (20,570-dollar) Isuzu.
"But I really wanted to buy a pick-up at the show and have set aside the money for this model, which comes with some attractive financial incentives," the 43-year-old from Bangkok told AFP.
Somboon is among the 1.6 million visitors expected at the 10-day Bangkok Motor Show, which kicked off on Friday.
Thai automakers hope the show will bolster sales that slumped 20 percent in the first two months of the year, compared to the same period in 2006.
"The auto show usually contributes significantly to sales in March, so we expect sales to recover this month," said Wichien Emprasertruk, senior vice president of Toyota Motor Thailand.
"People still have their normal purchasing power and will buy if we offer the right products that suit their demand," he said.
Early indications are that buyers are more interested in smaller, cheaper vehicles -- like the newly launched Vios sedan, which has a sticker price under 700,000 baht (20,000 dollars).
"Vios is the cheapest sedan available on the market," one Toyota sales manager told AFP. "People are going for it, even without financial incentives."
But Thailand's political uncertainties weigh heavily on consumers such as Apinya Kochakong, who said she was undecided on whether to buy a mid-sized Toyota Camry.
"I have set aside two million baht for a car," said the 38-year-old Bangkok business owner, who came to the show with her husband and two daughters.
Her family's construction business has slowed down, but only a little, amid the ongoing political uncertainties which she expects to last for the rest of the year.
"The economy is expected to pick up next year. That's why I'm still not sure whether to buy one from the show but it is highly likely that I will if I get the right offer."
The military-installed government has promised to hold elections in December but it must clear several political hurdles first, including the approval of a new constitution still being drafted.
Suraphong Paisitpattanaphong, spokesman of the Automotive Industry Club (AIC), said if consumer confidence improved and the economy picked up, the industry could achieve 3.0 percent growth this year.
That would mean total sales of 700,000 units, up from 682,000 last year, for an industry that accounts for nine percent of the Thai economy.
But analysts said car sales were likely to be flat this year, despite expectations for lower interest rates.
"Interest rate cuts would boost purchasing power but do nothing for sentiment because confidence remains poor," said Nuchjarin Panarode, an economist and auto analyst at Capital Nomura Securities.
"Politics has disturbed confidence, prompting us to believe car sales will remain in negative territory in the first quarter before picking up in the second half," she told AFP.
Sales in 2006 fell 3.0 percent, after years of record gains, due to months of anti-government street protests that eventually led to the coup in September.
Confidence has yet to recover, especially with the military government's confused economic policies and new political tensions due to a nascent anti-coup protest movement.
But exports are still a bright spot in Thailand's automobile industry, despite a strong baht that makes Thai products more expensive overseas.
Heavy investment, especially by Japanese automakers, is turning the country into a regional production and distribution centre that is expected to grow regardless of the weak economy.
Manufacturers forecast export volume could rise 12 percent this year to 600,000 units, as Thai-made pick-up trucks enter new markets such as Latin America, said Suraphong of the AIC.
Overall, the auto industry could grow 4.0-5.0 percent, with manufacturing volume targeted at 1.28 million units in 2007, up 7.9 percent from last year, he added.
- AFP/ir
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