Used car market showing renewed strength

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Used car market showing renewed strength

The organiser of the Fast Auto Show Thailand, which will take place over five days from 2 July to 6 July at the Bangkok International Trade and Exhibition Centre on Bang Na-Trat Road, claims there are good signs of improving sales in the used car market in the country. This is despite the long-running political crisis and weakening demand in the new car sector, the latter being an easy economic prediction in line with ending of the government’s first car buyer scheme.

Given the strong support shown for the used car market position in Thailand by the entry of the Japanese used car company Gulliver International, there does indeed seem to be a reason to be optimistic in the medium to longer term over the strength of the second-hand sector.

The used car market was hit hard by the government-sponsored first-time car buyer scheme, which attracted around 1.25 million applicants. This scheme drove down the price of used cars, but the Fast Auto Show organisers are suggesting the market has bottomed out and is beginning to show improvement.

In 2013, the Fast Auto Show sold 3,900 used cars and had around 270,000 visitors. This year, the organisers believe sales will reach 4,000 units and draw about 300,000 visitors.

The Association of Used Car Dealers say there are some three million units valued at 900 billion baht in the second-hand car market in the country, as of the end of 2013. The Association expects supply will drop this year in line with expected lower sales of new vehicles.

The Federation of Thai Industries (FTI) is currently projecting new car sales to drop to 1.2 million in 2014, although this could fall to below one million units if the current political crisis continues for many more months. Sales of new vehicles peaked at 1.43 million in 2012 and fell to 1.33 million last year.

So, a concomitant gathering of strength for the used car market is not altogether unexpected. Prices have levelled off and the one area where it is regaining momentum is in the 1500cc segment where prices tend to range between 300,000 and 400,000 baht.

The Thai auto market is expected gain greater strength in coming years as Asean as an economic grouping continues to see rising GDP. The ratio of car owners to households is approaching 14 percent in Thailand and companies like Gulliver believe this will rise substantially into the future. This latest recovery in the second-hand marketplace shows not only the resilience of the market but possibly a general feeling that the political traumas of recent times cannot continue indefinitely and the economy will soon recover.