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Honda's sales of passenger cars in Thailand may surpass Toyota's for the first time

In a hotly contested market, achieving the sales leader position in the passenger car sector is considered a hard fought victory. Whilst Toyota has been in the leading position before, it may be Honda's turn for the first time in history.

Still, the counting exercise is not as straightforward as it might seem in Thailand, since the classification of different models needs to be taken into account.

Interestingly Toyota Motor Thailand Co is the designated sales compiler as quoted by the media and so you might think the figures are biased somewhat. However this is not the case since the count includes classifications for all manufacturers. Herein, though, lies somewhat of a quandary. The Honda CR-V for example is classed as a commercial vehicle under the counting system, as is the Mazda CX-5. Yet in reality both of these cars are classed as sport utility vehicles and are taxed as passenger cars. Even in Japan, the CR-V and the CX-5 are both classed as passenger cars in the market according to the Japanese Chamber of Commerce.

Towards the end of last year, even despite the apparent misclassification, Honda was still in the lead with 178,973 vehicles sold versus Toyota’s 172,916 units. Of course, Honda would wish the CR-V sales to be included in the count, in which case it would be a clear leader with 198,005 cars sold in total, some 15 per cent more than Toyota's achievement. 

Without the CR-V included, the numbers point to a tight race, especially considering that there are good pre-order numbers for Toyota’s Yaris.

A look at total auto sales as opposed to just passenger car numbers showed some interesting trends. Toyota was by far the largest auto seller with 404,151 units amassed in Thailand. This represented a 33.2 per cent market share, but sales were down overall 15 per cent on the previous year. Honda scored a respectable second place with 198,005 units, which represented a 16.3 per cent market share, with sales showing a 31.4 per cent increase on the previous year. Thus Honda is gaining market share, and Toyota is losing its strong foothold, at least for now. Isuzu came in third place with a 15.5 per cent market share selling 188,365 vehicles. This number was down just 1.8 per cent as compared to the last year. Much of Isuzu’s market is in the commercial vehicle sector and so it scored well in the total sales counts but not so well in terms of passenger car sales numbers.

Commenting on the large increase on Honda's part, executive vice president at Honda Automobile, Pitak Prutthisari-korn said that the growth was mainly due to the launch of the Brio Amaze, which helped Honda to introduce six models into the popular first car scheme.

He added, "We received a large number of orders for this group of vehicles and a large number of deliveries were postponed to this year."

More cars destined for Australia are now to be made in Thailand

Toyota will end local assembly of its cars in Australia in 2017 when it closes down it plant there. The move follows similar recent moves made by General Motors and Ford. Toyota’s Thailand plants will likely be making more cars for export to Australia once the changes occur.

Much of the reason for the manufacturing bases being in Australia in the first place were to do with tariffs and import duties. In a market where scale matters, Australia never did warrant a manufacturing plant to serve the Australian market, as it was a relatively small operation. Yet automakers previously were making cars in Australia due to the fact that import duties were sky high to protect local production. 

Now the tariffs have come down it has allowed automakers to shift their manufacturing focus to lower cost bases and import the cars, just as they have done in many other countries. Tariffs are now at five percent as compared to above 50 per cent in the 1980’s and 30 per cent in the 1990’s.

The USA might see similar shifts after tariffs there are reduced, however it remains a large market and the economies of scale are already in place there. Whilst other countries may be poised to take up extra manufacturing, the U.S. car industry is still seen as strong. 

Australia’s market is very small in global terms. Just 1.1 million cars were sold last year and barely 200,000 cars were made in Australia by the country's three remaining manufacturers. By contrast Toyota produced more than 1.7 million vehicles alone in the same period. The company made only 106,300 vehicles at its factory located just outside Melbourne, Australia. The models made were the Camry Hybrid, the Aurion and the Camry sedan.

Curiously even though Australia is far away from other markets, Toyota exported more than 67,000 vehicles out of Australia and then imported more than 185,000 cars to keep up with local demand! Much was due to the models ordered being made in different locations. 

Some factors that have made Toyota move its manufacturing offshore completely are the relatively strong Australian Dollar and the move to smaller cars that have lower margins and that suit production in Thailand and South Korea. Cars made in Thailand will account for about seventeen per cent of all of Australia's auto imports as the Kingdom flexes its muscels of mass production. 

Local jobs in Australia have been lost due to the fact that auto production is being moved away from the country. Parts suppliers and other business down the chain also felt the pain. There has been a progressive move out of Australia in recent years. Nissan halted production in 1992, and Mitsubishi stopped making cars in Australia in 2008. Ford and GM have both announced plans to close their plants in the territory in 2016 and 2017 respectively. Toyotas upcoming closure will mark the end of auto manufacturing in Australia, at least for the foreseeable future.