The Thai government is in the midst of discussing a trade-in car scheme with carmakers. Organisations hope for the scheme to improve Thailand’s declining automotive sector.
TRADE-IN SCHEME
Considering the Thai auto industry’s plummeting sector, officials are hoping that a trade-in and scrapping scheme could give the sector the boost it needs. Thailand’s auto sector comprises 10 per cent of the country’s GDP. Both industry leaders and government officials have highlighted the need for the auto sector to improve, following a four-year low from the pandemic.
“Japanese automotive companies, including Toyota, have been continuously discussing End of Life Vehicle schemes under the initiatives and direction of Thai Government to reduce aged vehicles which have a tendency to have higher emissions,” said Toyota, a major player in Thailand’s auto industry. “The framework and mechanism are being discussed among industry, government and academia.”
Proponents also intend for the proposal to help the sector properly dispose of aging vehicles, reducing environmental waste for the country.
So far, officials revealed that the scheme involves consumers trading in their used vehicles for a reduced price on their next vehicle. The concerned bodies are in talks of proposing the scheme to last years.
BOOSTING FOR BENEFITS
This trade-in scheme can help legacy automakers such as Toyota and Honda compete in the current competitive market. Around the world, especially in Southeast Asia, Japanese auto giants are gaining stiff competition from new EV makers from China.
Price reductions from the trade-ins can potentially spur customers towards newer and more environmentally friendly models. Purchasing newer models can help the legacy automakers maintain or even expand their market shares.
In an interview with Reuter, President of the Thai Auto-Parts Manufacturers Association, Sompol Tanadumrongsak told the publication: “Car makers are pushing hard for this because they want to sell cars.” This underlines the state of Thailand’s current car market, where both automakers and organisations are desperate for a breakthrough.
Though promising, the proposal is still in its early stages. Federation of Thai Industries (FTI) Auto Club Spokesperson Surapong Paisitpattanapong, was quoted to have told Reuters that though discussions are taking place, nothing has been finalised yet. “One reason is because it involves many agencies,” he added.
“There is a proposal from the Federation of Thai Industries and the private sector, but it has not reached the finance ministry yet,” said head of excise department, Kulaya Tantitemit.
Suwit Chobpradu, vice president of Thailand’s Used Car Association, said that the proposal would “stimulate the market more than any policy,” implying that it would be significantly beneficial if the proposal were to be approved. According to Chobpradu, this would create new employment opportunities and investments in Thailand’s car market, as the country is still lacking in auto recycling plants.
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