Hybrid Vehicles Face a Bumpy Road in Southeast Asia

bangkok-thailandThree years ago, Toyota Group began producing and selling the first hybrid model—a Camry—in Thailand. Since then, sales of hybrid cars in that country have grown significantly. In 2012, hybrid sales in Thailand were 19,000 units. Sales of hybrids in Thailand have been growing at an average rate of almost 60% during this time frame. Now, there are at least four hybrid models being sold in the Thai market, and this year hybrid vehicle sales are projected to surpass 20,000 units.

Despite strong and stable growth, a volume of 20,000 unit sales is miniscule in a country where projected sales volume in 2013 is 1.2 million light vehicles. The hybrid vehicle sector accounts for only a 1% share of the entire domestic market (3% of passenger-vehicle volumes). This is very small compared with an 18% hybrid share in Japan, the home market of the key OEMs that have sales operations in Thailand. To be fair, the ratio of hybrid vehicles in Malaysia, a key competitor for regional production of hybrids, amounted to just 2%, or sales of 15,000 units, last year.

Currently, we expect the market share of hybrid cars in Thailand to be under 5% for the foreseeable future. Our projection for hybrid sales in 2020 is slightly over 30,000. In comparison, hybrid vehicle sales in Malaysia are likely to nearly reach 50,000 units by 2020, and will account for almost 10% of that country’s passenger-vehicle market. Continue reading ›

First-Time Buyers of Compact Cars in Thailand are More Critical of Vehicle Quality

Gerrit Kuyntjes

New-vehicle initial quality in Thailand has slipped slightly this year due to a higher incidence of problems with compact cars, which have become more prevalent in the vehicle mix due to a government eco-car incentive program* and a first-time buyer program,** according to our 2012 Thailand Initial Quality Study (IQS).

Overall initial quality this year averages 116 problems per 100 vehicles (PP100), compared with 113 PP100 in 2011. In the IQS, performance is determined by the number of problems experienced per 100 vehicles (PP100), with a lower score reflecting higher vehicle quality. Our 2012 Thailand IQS is based on evaluations from 4,674 new-vehicle buyers during the first two to six months of ownership, and examines more than 200 problem symptoms in eight categories.***

Thailand New-Car Buyer Demographics are Changing Requirements

One reason for this year’s dip in initial quality may be due to changes in the vehicle segment mix and the increased number of first-time buyers. In the 1980s, the Thai government (Ministry of Industry and Board of Investment) created industry policy to encourage OEMs to build pickup trucks with diesel engines in Thailand, according to Tim Dunne, J.D. Power senior global automotive analyst.

He points out that pickups are easier to engineer and manufacture than cars, and diesel engines are more durable and fuel efficient than gasoline engines. Pickup trucks also received favorable tax treatment from the government (lower taxes on pickups compared with passenger cars), which made them much more affordable to Thai consumers. Thailand is the second largest producer of pickups in the world (after the United States), and the largest exporter of pickup trucks in the world, according to our research. Continue reading ›

Small-Vehicle Demand Bolsters September U.S. Sales

Consumers continued to replace their aging cars and trucks with more fuel-efficient new models in September—especially since higher gasoline prices* helped prime demand for sub-compact or compact new vehicles with smaller engines and even alternative powertrains, in particular hybrids. In addition, discounts on outgoing 2012 models plus excitement about new and redesigned models helped boost sales by nearly 13% from the same month last year.**

Total U.S. new-vehicle sales in September reached 1.187 million units, which translated to a relatively strong 14.9 million-unit seasonally adjusted selling rate (SAAR), according to J.D. Power’s Power Information Network® (PIN) and strategic partner LMC Automotive. September’s sales pace was significantly stronger than last year’s 13.1 million-unit SAAR. Continue reading ›

Some Unexpected Brands May Gain Sales with Engine Downsizing

Tyson Jominy

As we see new-vehicle buyers and lessees continue to shift from large to midsize vehicle segments and from midsize to small or compact segments, there has been a decrease in the size of engines. In addition, we are seeing that consumers who do not downsize are finding more fuel-efficient powertrain options at the segment and model level, according to our Power Information Network® (PIN) retail transaction data.

Detroit Automakers will Not be Left in the Lurch

An interesting change related to the shift to smaller engines this time around is who is leading the charge, and therefore who will stand to reap the gains. Two Detroit automaker brands, Ford and Chevrolet, are exclusively offering 4-cylinder engines in their freshened midsize cars—Fusion and Malibu, respectively. In addition, Ford offers 4-cylinder powertrains in their midsize crossovers and now offers a V-6 in the F-150 that is selling very briskly. In fact, the Ford EcoBoost powertrain sub-brand is turning out to be one of the early automotive successes of the decade. Continue reading ›