Pandemic Becomes a New Opportunity for Used Car Dealers in Thailand as New Car Sales Drop due to Buyer’s Limited Budget: Ken Research

Key Findings

One negative for used cars is the 7% VAT that’s added to the bill if the customer buys from a showroom or used car dealer, or use a loan to finance the purchase.

Consumers are shifting away from traditional methods & increasing using online platforms for their used car buying/selling journey. Many start-ups and auto portals present in Southeast Asia are entering the Thailand market or expanding their presence through mergers & acquisitions, seeing the industry’s potential.

One Ton Pickups have gained a significant share in the used cars market in the last five years as they are better aligned with the expectations of Thai consumers. This is mainly due to the reason that they can be used as passenger and commercial vehicle for transportation. Moreover, theses vehicle enjoy a tax rebate if registered as commercial vehicles.

Growth of Digital Platforms: Increasing internet and smart phone penetration in the country has resulted in large number of consumers preferring to buy and sell cars through online auto classifieds and social media. Auction Houses are also increasing their spending on online advertising and generating leads through these platforms. Data from Google Trends also indicates that the market has gained more attention. Searching for major second-hand car brands on the Internet increased in the past two years.

Unorganised dealers dominate the Sales Volume in the Market: Independent dealers (Car Tents) dominate the market due to large presence across the country. These dealers are also increasing their online presence by listing their inventory on their own website/Facebook account or platforms resulting in market growth. The players in the unorganized sector give strong preference to less-aged cars and popular brands with good resale value. Consequently, buyers have limited range of vehicle options to choose from.

Sluggish Growth Rate Due to First Car Buyer Program: From 2011 to 2012, the Thai government implemented the First-Time Buyer Program to encourage automobile consumption, which led to a rapid growth in automobile production and sales. However, by the end of 2017 the market was flooded with second hand cars after the end of program. This caused a decrease of 20%-25% in the price of used car thereby affecting the industry revenue.

Declining Used Car Sales Demand due to Covid-19: The demand for used cars decreased during the corona virus pandemic. This was due to low supply and also due to closure of OEM dealerships and Local Tents during lockdown. This was further fuelled by decrease in purchasing power which led to postponing of new and used car purchases. Also, Thailand has recently recovered from a political and economical instability which has led to a decline in supply. Apart from sales issues, used car companies experienced cash flow difficulties due to the fact that most of the banks were not repossessing cars. The demand for used cars in the country remained low at the starting of 2020, however there was increase in demand in the second half of the year post ease in confinement. Slow recovery is expected in 2021. The manufacturers are expected to shift focus towards digital medium in order to drive sales and increase customer footfall.

Analysts at Ken Research in their latest publication “Thailand Used Car Market Outlook To 2025 – Growth of Online Used Car Platforms and Easy Availability of Credit Escalating Industry’s Growth” observed that Thailand is a growing used car market in South East Asia and is slowly recovering from the economic crisis after pandemic. The increasing credit availability in the country along exemption in taxes is driving the growth of the industry. Increasing focus on promotional and marketing activities, new product launches, partnerships & collaborations are expected to drive the industry in the future. The Thailand Used Car Market is expected to grow at a CAGR of 7.3% on the basis of GTV over the forecast period 2020-2025.

Thailand Used Car Market _ InfographicKey Segments Covered

By Market Type

C2C

B2C/OEM organized

Multi Brand Organized Dealer

Multi Brand Unorganized Dealer

OEM Organized

Auction

By Car Segment

Hatchback

1 ton pickup

Sedan

MPV, HPV/Mini MPV

SUV

By Region

Bangkok

North East

North

South

East

West

By Kilometers Driven

Less than 20,000

20,000-50,000

50,000-80,000

80,000-120,000

Above 120,000

By Age of Vehicle

Less than 1 year

1-3 years

3-5 years

5-8 years

More than 8 years

By Age of Buyers

20-30 Years

30-50 Years

Above 50 Years

By Source of Lead

Online (Social Media/Car Portals/Official Website)

Offline (Dealership Walk-in)

Companies Covered (OEM Dealerships)

Toyota Sure Thailand

Honda Used Certified Thailand

Mitsubishi Diamond Used Car

Nissan Intelligence

Mercedes Certified

Volvo

Companies Covered (Online Portals)

ICar Asia (One2Car, Thaicar, Autospinn)

Carsome Thailand

Carro Thailand

Key Target Audience

Used Car Companies

OEMs

Online Used Car Portals

Used Car Financing Companies

Government Bodies

Investors & Venture Capital Firms

Used Car Dealerships

Used Car Distributors Auction Houses

Used Car Associations

Time Period Captured in the Report:-

Historical Period – 2014-2020

Forecast Period – 2021-2025

Key Topics Covered in the Report

Executive Summary

Research Methodology

Thailand Used Car Market Overview

Thailand Used Car Market Size, 2014-2020

Thailand Used Car Market Segmentation, 2020

Growth Drivers in Thailand Used Car Market

Issues and Challenges in Thailand Used Car Market

Regulatory Framework

Snapshots on Used Car Financing

Snapshot on Auction Market

Snapshot on Used Bike Market

Ecosystem and Value Chain of Used Car Industry in Thailand

Customers Purchase Decision Making Parameters

Cross Comparison between Major OEMs and Multibrand Dealers and Company Profiles & Product Portfolios

Future Market Size and Segmentations, 2021-2025F

Covid-19 Impact on the Industry & the Way Forward

Analysts’ Recommendations

For More Information on the Research Report, refer to below links:-

Thailand Used Car Market

Related Reports by Ken Research

Indonesia Used Car Market Outlook to 2025 – By Market Structure (Organized & Unorganized), By Type of Car (MPVs, Hatchbacks, SUVs & Others), By Brand (Toyota, Honda, Daihatsu, Suzuki & Others), By Vehicle Age, By Mileage, By Customer Age and By Region (DKI Jakarta, East Java, West & Central Java, North Sumatera & Others)

Saudi Arabia Used Car Market Outlook to 2025- By Market Structure (Organized & Unorganized), By Type of Car (Sedans & Hatchbacks, SUVs & Crossovers, Pick-ups and Luxury), By Brand (Toyota, Hyundai, GMC & Chevrolet, Ford and Others), By Type of Sourcing, By Age of Vehicle (Less than 1 year, 1-3 years, 3-5 years & More than 5 years), By Kilometers Driven (Less than 50,000 Km, 50,000-80,000 Km, 80,000-120,000 Km & More than 120,000 Km) and By Region (Northern, Southern, Central, Eastern and Western)

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Ken Research

Ankur Gupta, Head Marketing & Communications

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