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Jump-Start for Auto Sales

Thailand has long been the engine of Southeast Asia's auto industry, and it used to enjoy robust consumer demand. Japanese brands dominate the market, but a protracted sales slump has forced them to change gear. NHK WORLD's Toshiaki Watanuki has the details.

Thailand is currently hosting Southeast Asia's biggest motor show. Japanese brands have unveiled new models to try and boost their disappointing sales.

One model produced by Nissan Motor will be more than 10 percent cheaper than the competition. The weaker yen is one factor behind the lower price tag.

Half of the parts, including the engine, are sourced from Japan and assembled in Thailand. By importing more parts, the manufacturer can take advantage of the rapid depreciation of the yen to keep prices low.

"Procuring parts from Japan used to be considered costly. But, the recent depreciation of the yen actually helps push down our costs."
Hiroyuki Yoshimoto / President, Nissan Motor Thailand

About 9 out of 10 vehicles sold in Thailand are Japanese models, and there's still plenty of room for growth. Per-capita car ownership is less than one third of what it is in Japan.

But ever since the Thai government ended a subsidy program, demand for new cars has slumped. Year-on-year sales declined for 18 months in a row.

Dealers are trying desperately to shore up sales by offering rock-bottom prices and zero-interest loans.

But buyers remain unconvinced. Some are cautious about spending because of the state of the economy. Others believe that the government should lower taxes on cars, or help with insurance coverage.

Mazda will launch a new diesel-powered compact car in Thailand next month. Its efficient mileage will allow it to qualify for a government tax break on eco-friendly vehicles.

"With local production lines and this new eco-friendly model, we intend to solidify our focus on Southeast Asia as a mainstay of our business."
Yuji Nakamine / Senior Managing Executive Officer, Mazda Motor

Mitsubishi Motors has unveiled a new pickup truck, the first overhaul of a well-known model in 9 years. Mileage performance has been improved by 20 percent.

"The past two years have been a period of adjustment. We're cautiously optimistic that sales have turned the corner and will gradually recover going forward."
Osamu Masuko / Chairman and CEO, Mitsubishi Motors

Thailand's auto market is at a turning point. An expert says the trend is clear.

"The government wants to focus on producing cars that are environmentally friendly - vehicles that are highly efficient and consume little fuel, but are also safe. Companies that plan to introduce automobiles on the Thai market should watch those factors closely."
Vichai Jirathiyut / Thailand Automotive Institute

The high growth rates Thailand enjoyed for many years can no longer be taken for granted. Automakers must rapidly rethink their strategies to convince consumers to get on board.

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