A new law to ensure supervision of auto hire-purchase and leasing of cars and motorcycles should not affect the Thai automotive industry, which is expected to flourish in the second half of this year, says the organiser of the 2023 Fast Auto Show Thailand.
Jointly drafted by the Bank of Thailand and the Fiscal Policy Office, the law is scheduled to take effect on Nov 1 this year.
The law aims to maintain the country's financial stability by keeping household debt at an appropriate level and preventing consumers from becoming overburdened.
It is also meant to ensure auto hire-purchase and auto leasing businesses treat consumers fairly, providing them with sufficient information to make decisions about loans and offering access to products at reasonable prices.
However, despite the stricter regulation, domestic car sales are still expected to increase later this year.
"The tourism recovery will boost the economy, stimulating demand for new and used cars in Thailand," said Pattanadesh Asasappakij, chairman of a committee organising the 2023 Fast Auto Show Thailand.
He believes people will not delay a decision to buy a car, despite banks' strict criteria when granting loans and ongoing political uncertainties, because these consumers genuinely need a vehicle.
Congsin Congcar, head of Krungsri Auto Group under Bank of Ayudhya Plc, said his company knows the law is meant to curb household debt and better control the rate of non-performing loans, but it believes this would not deal a blow to car sales.
"The Thai automotive industry will further improve in the second half of this year as tourism boosts consumption and car companies will launch marketing campaigns to attract buyers," he said.
Auto loan grants in Thailand are expected to grow by 1% this year to 527 billion baht, according to the company's estimates.
Krungsri Auto's auto loan grant rate usually stands at 80% a year.
"Loans are mostly given to buyers of oil-powered cars, but loans for EVs increased by 400% during the first five months of this year," Mr Congsin said.
The Fast Auto Show organisers expect car bookings to stand at 2,000 units -- 1,600 new cars and 400 used cars -- in 2023, close to last year's numbers.
The event will be held at Bitec Bang Na in Bangkok from July 5-9.
