Toyota Seeking Special Privileges from Thai government

Toyota Motor Thailand is currently lobbying the Thai government, seeking a lifting of import duty for CKD parts to be used in the assembly of hybrid vehicles in Thailand.

This actually comes as little surprise, since Toyota are to start assembly of the Camry Hybrid next year. Toyota are seeking to have the 30-40% duties removed, to allow them to price the Camry Hybrid under THB 2 million.

The Camry 2.4 already enjoys a low excise duty rate of just 10-per cent, thanks to its E20 gasohol compatibility, yet Toyota charges THB 1,689,000 for the car! Now, I don't even pretend to understand the complexities of the global economy, the increasing prices of materials and so on, but there is a question that needs to be asked here.

Why are the prices of cars not going down, but going up even with such generous reductions in excise tax being afforded to the automakers? Before the E20 cut, the 2.4 litre Camry was hit with a significant 35% excise rate. Given the reduction, why are these cars creeping up in price, not down?

Not Just Toyota

Another culprit is Honda. Recently Honda increased prices by THB 10,000 across the board. Honda recently updated it's entire range and offers E20 capable engines throughout. Despite this, and the fact that the new models enjoyed a 20% excise rate cut, prices were virtually unchanged from outgoing models.

Remember these cars are produced locally. Back to the Camry, and before we start getting really cynical here, let's just do a quick comparison.

Thai Camry 2.4 - THB 1,689,000
US Camry 2.4 - US$19,145 - 25,745 (Currently around THB 672,000 - 896,000)

Remember, the Thai Camry is built in Thailand. Thai workers are not exactly the highest paid in the world, and the excise rate is not excessive. So why is the Thai Camry two to three times more expensive than the American Camry.

So, forgive me if I can't imagine Toyota enjoying massive profit margins in Thailand, at the expense of the Thai buyer. And it is very hard to take their appeal for this hybrid privilege seriously. The Camry Hybrid is under THB 1,000,000 in the US! Why should Toyota be struggling to assemble it in Thailand for THB 2,000,000 baht?

Besides if a special rate was set for hybrid vehicle assembly, Toyota will be the only manufacturer to benefit from it. On the other side of the argument, I think all would agree that the government needs to take more action in supporting alternative fuel vehicles. But if THB 2,000,000 is going to be the price for Hybrid, even after a excise rate reduction, forget it!

By the way, I intended to just report on this story without adding my own spin on it. That said, it is my site! If you have opinions on the cost of cars in Thailand, and the hybrid privilege Toyota is seeking, sign in and post your comments!