Cars Dealers Suffer From Yingluck's Populist Policy

    (28 August) Like her
    influential brother, Prime Minister Yingluck Shinawatra led Thailand down the road of populist
    policies aimed at easing the financial burdens of the grassroot and low-earning populace. Among her
    trademarks is the First Car Program which exempts tax for first-time car buyers.

    The
    government insisted it would benefit the low-income citizens and boost number of car sales. But
    critics warned that the policy contributed to increased traffic jams in the already clogged roads of
    Bangkok.

    A number of car dealers across the country are now complaining about the First Car
    plan as well, charging that it distorted market demands and in fact damaged the car sales business
    in the Kingdom, reported our correspondent at Prachachart.

    A report from the Japanese
    Chamber of Commerce indicated that in September, car sales from every manufacturer combined amounts
    to less than 100,000 cars, despite the sweltering promotion campaigns.

    Market analysts
    believed that the motor business would also shrink at least 5-10% this year, as the real demand in
    the market does not match the virtual demand estimated by the car industry.

    Car dealers
    interviewed by our correspondent explained that the supposed demand was drawn up in the previous
    period when the government announced ?First Car Program?. Excited customers rush to the car dealers
    to place their orders to take advantage of the policy while it lasted.

    But not every customer actually buys
    the cars they ordered. Some backed off later, once they realised they did not have the financial
    capability to purchase and maintain the vehicles. Others purchased the cars but have had a hard time
    paying for them later due to their low income.

    What followed is a distorted market in which
    the manufacturing sector over-produced their cars, and it was up to the dealers to bear the task of
    selling these unclaimed motors – not an easy task, the dealers said, because very few customers
    would want to buy cars that had been left sitting at the showrooms.

    Sales persons are forced
    to reduce their own commission fee, and to top more perks for their customers, particularly the 0%
    instalment and First Class Car Insurance.

    Some motor giants tried to resolve the matter by
    offering jaw-dropping discounts to boost their sales, sometimes offering a price even lower than the
    tax-exempted car price in previous year.

    But it appears that the situation also hurts the
    customers; the red hot promotion led many people to buy the best offer they see, ignoring their own
    needs for appropriate gears and services.

    The dealers told our correspondent they are
    still waiting to see if the situation will improve later this year, the time of the year when many
    new customers seek out cars to buy.