Thailand’s battered auto market has come up with an idea that it hopes will spur the new car market – cash for clunkers. The Federation of Thai Industries (FTI) auto club is proposing a car trade-in scheme to the government to help boost domestic demand for autos. It’s ultimately a bid to prop up volume for the carmakers and prevent job losses.
The FTI is also urging the Thai government to extend the corporate income tax deadline for another year from this year’s August date because carmakers want to hold on to precious working capital in these hard times, brought about by the Covid-19 pandemic.
Under the proposed cash for clunkers scheme, the government will encourage Thais to purchase new and eco-friendlier vehicles, while trading in cars that are over 20 years old, FTI auto club spokesman Surapong Paisitpatanapong told the Bangkok Post, adding that around two million old cars in Thailand would qualify for the scheme.
However, the scheme will need car companies to opt-in, with each company determining which of its models will be eligible. Surapong also said that the government may not be able to fund the scheme entirely, but it could provide some support, such as a subsidy of 50,000 baht (RM6,848) per car.
“The global economic slowdown has lowered purchasing power both in Thailand and overseas, which has affected sales volumes. Many carmakers cannot afford to pay operating costs, which include labour, so some companies are cutting work days and delaying reopening their manufacturing plants after shutting down in April,” Surapong said, adding that some OEMs and auto parts companies are considering lay offs.
It’s likely that companies will try to retain high-skilled labour. “The first group that car makers will likely let go will be subcontracted employees, then employees will be offered the option of voluntarily resigning,” the FTI man added. The automotive and related parts industries employ around 750,000 people in the “Detroit of the East”.
It was earlier reported that car sales in Thailand fell 65.02% in April to 30,109 units, which is the lowest level in a decade.
Last month, FTI said that Thailand’s auto production is expected to fall 37% to 1.33 million units this year, and the drop could be as bad as 50% (to one million units) should the Covid-19 crisis drags into June. The latest 1.33m forecast consists of 665,000 units for export and 665,000 units for domestic consumption, split evenly. Previous projections were two million units in January and 1.9 million units in March.
If this proposed scheme sounds familiar, you might recall the Proton Xchange programme from 2009, where the national carmaker offered a RM5,000 cash rebate with a new Saga or Persona, in exchange for a car that was over 10 years old. Proton received a total of 25,862 applications from March to October that year, exhausting the funds provided by the government’s economic stimulus plan before the year ended.
Since then, carmakers and the government have toyed with scrappage as part of a wider Vehicle End of Life policy, but the idea has always met with resistance from the public despite the proposal being voluntary. And because of that, there has been no fruit.
It was popular in that small 2009 window, but would an old car trade-in and scrappage scheme work again in today’s Covid-19 ravaged car market? If implemented in Malaysia for say, locally assembled cars below RM100k, do you have anything to exchange for a new car discount, and if yes, would you do it?
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20 years old car. How to beat brand new Proton?
Thai Gomen is very clever. They don’t think like MITI or MAI in Malaysia. This is why Thailand is the Detroit of Asia. The past 30 years, Thailand has got about few hundred billion USD in investments. These investments was supposed to come to Malaysia because in the 90s, we were the Detroit of Asia. But because of ketuanan issues and favourtism, all car companies decided to go to Thailand.
You see even with this decision, you will see Thaialnd progress with their car industry being the Detroit of Asia.
MAI and MITI and Marii, pls wake up from your deep slumber
And now because of their reliance on foreign brands, they are in deeper recession compared to malaysia. Me thinks MAI, MITI, and MARII had done the right thing. Thai govt should come down here and learn from us how to be the Tesla of Asia.
Do you think G coffer enough for this? Just look at quarantined hotel, today also have to pay half. No more money. Enough to pay salary for new ‘ bosses’ of GLC.
Uoll suffer in front. we hepily makan at back… Cukurr G jage kita, hahahkakaka
But the people online say it is very good because they are very used to cangkung toilet. In the kampung all, people just cangkung. So they say the badly run down quarantine centre look like hotel
Proton Xchange 2020 or 2.0? Rebate 5k ➕ government subsidy 5k so total RM10k for Saga, Iriz and Persona only….
It depends. If clunkers are traded in for peanut money (meaning given amount that one cant even buy a kapchai), then it would not be attractive.
Heck, who’s gonna trade-in their P1 Saga, then barely receiving a thousand ringgit for it? Better keep the car, for ferrying kids, beli barang runcit, and other oddjob.
my old w124 230e is stupidly reliable and solid and almost costs next to nothing to maintain, with little parts to go wrong. i can’t say the same for a w212.
Oh yes…the tank on 4 wheels.
212 and above…need to spend as much as the w124 worth within 3-4 years of ownership to get it running 100%.
The W124 even got some function which most modern cars do not have.
I agree, my w212 is an absolute junk compared to my old w124.. Planned obsolescence is name of the game now..
Oh yes, until something does go wrong, like the gearbox. Additionally I can’t imagine the cost of fuel and maintenance needed to keep that old barge moving. Brother had one, so I would know. Never been a fan of old things unless one bought it from new and do many small jobs to keep it going. Even more shocking are people who buy old vehicles just to savor the rickety past
the parts are cheap anyway, full of chop shop or spares.
If anything, I could earn money if I bought an old car and sold it now, after some improvements.
Only problem is I bought my 230E when i was a small time menteri
Malaysia may follow but our car price must be lowest because some of our people’s can afford a new car’s with an installment. not all peoples are from wealhty family that can afford a new brand car even A-segment sedan. That’s why some of B40 people always buy a secondhand car so they can use it. but till when? every year all car company produce a better quality car’s but some of Malaysian people’s use an old scrap car more than 10 years old.
Cars are so cheap we can even afford to abandon them by the masses at secluded spots and parking lots. Better to have trade in program and scrapping policy.
The public somehow cannot accept or understand a scheme that is voluntary or optional if it involves giving up an older product to get a new one. They think it somehow renders all old cars useless or worthless.
Its very impossible to implement here, 9 years to complete the car loan. It will possible if our car price likes in US.
It is a common sight now that cars being abandoned by the road side. Perhaps this initiative can drastically reduce abandoned cars in our neighborhood.
Nobody interested or wants trade-in, in exchange for kulit kacang puteh money.
I once tried trade-in of my old clunker. Guess what? What they offered was less than the amount of buying a set of new tyres (14″ size).
I think jual besi-buruk by KG fetch better price.
It’s voluntary yes but will I accept?
Well if my clunker is worth less than they’re offering say my car’s value is rm2k..they offering rm5k..I may accept it.Sounds very enticing but to take another 9 years loan I still have to think twice.
That’s why I try to maintain my car at tip top condition so that after 9 years it’s still running good. Good thing I only left 1 year plus to finish the loan.If possible not getting another 9 year loan.Im getting older not younger..
Better buy motorcycle with loan 3 years..bored with it you still don’t loose to much..
Will I trade in my 1986 KE70 DRIFT machine for rubbish and boring front-wheel-drive proton? No.
Cash is king. In current situation, conserve cash, dont engage in new loan. Paham???