The government's first-time car buyer programme has taken its toll on the used-car market, with prices of used cars expected to be up to 50% cheaper than those of new cars, say hard-pressed dealers.
Used cars are typically 30% cheaper than their brand-new counterparts. PATTARACHAI PREECHAPANICH
The used-car market has been hard hit since last September after the launch of the tax rebate of up to 100,000 baht for first-time car buyers, luring consumers to opt for new cars, particularly popular eco-cars.
The scheme also forced used-car dealers to cut prices to stay competitive.
The programme expired at the end of 2012, with rebate applications filed for 1.25 million cars, according to Excise Department figures.
As of the first quarter, about 850,000 cars had been delivered to buyers.
Used cars are typically 30% cheaper than their brand-new counterparts, with their price normally falling by 5-10% every year.
The price gap must be wide enough to offset the cost of maintenance and repairs.
Asadavut Asasappakij, general manager of VA & Sons Co, said a sharp price drop is likely for the premium used-car segment for Mercedes-Benz, BMW or Mini vehicles, which are expected to be up to 50% cheaper than new cars.
However, he said popular brands such as Toyota, Honda and Isuzu are expected to fare better, with prices 10-20% lower than those of new cars.
About 1 million used cars circulate in the market each year, sold by about 20,000 dealers.
Kwanchai Paphatphong, president of Inter-Media Consultant Co, which runs the Thailand International Motor Expo, estimated that out of the 400,000 undelivered vehicles in the rebate scheme, about 300,000 have been cancelled and 100,000 buyers have asked for a delivery delay.
He said some buyers could not afford payments, while others did not meet the loan conditions of leasing firms.
"The government has not specified a deadline for car delivery, so buyers may keep their orders," Mr Kwanchai said.
He expects overall domestic car sales to reach 900,000 to 1.1 million units this year, much lower than the target of 1.2 million forecast by the Federation of Thai Industries.