Global Watch

Global Watch October 2002 special issue: The Thai car market:New car sales are expected to reach 800,000 units by 2010(Full Text)

The Thai car market is regaining its glory: Car sales fell to 140,000 in 1998 from the peak of 590,000 in 1996, due to the currency crisis. Since then, they have been recovering, and it is likely that car sales will reach 380,000 this year.

The share of the Thai car market in East Asia is about 5% and around 30% in the ASEAN countries. In Thailand, the car ownership rate is higher than what personal income levels would indicate; the car ownership rate per household is 19.9%. One out of five households owns a car. The high ownership rate reflects the fact that the middle class, which led the boom in car purchases, grew rapidly in the early 90s.

According to our forecasts based on the income trend, car prices, and the number of households, car sales are projected to be 380,000 in 2002, 480,000 in 2004, 550,000 in 2006, 650,000 in 2008, and 800,000 in 2010. Double-digit growth rate is expected until 2004, since pent-up demand, restrained after the currency crisis, seems to have released gradually. After a slowdown, the growth rate is expected to accelerate to some extent in 2010, owing to replacement demand from those who bought cars during the 2002 - 2004 period. The stock of cars will reach 8.74 million in 2010, and about 13% of the total population will own a car.

Car sales will finally surpass the level before the currency crisis in 2007. In other words, about ten years will be required to restore the before-crisis level; the damage of the crisis is quite serious. As automobile transportation continues to make steady progress in Thailand, however, it is likely that its car markets will continue to expand.