Chiang Mai’s used car dealerships struggle to survive amidst economic woes and price wars.
In the midst of fierce price wars between electric and gasoline cars, coupled with the challenging economic conditions leading to a surge in repossessed vehicles and stricter financing, Chiang Mai’s used car dealerships are facing severe downturns. Many have shuttered their operations, and those remaining are fighting hard to stay afloat, even if it means selling cars at a significant loss to keep their businesses alive. However, for consumers, this could be a golden opportunity.
Several used car dealerships in Chiang Mai have been forced to either close down or reduce their branches due to the economic downturn and the price wars between new electric and gasoline cars.
Teerapat Phisut, a used car dealership owner in Chiang Mai, shared his struggles. “This is the toughest it’s been in 25 years of selling cars. It’s worse than during COVID. Car prices keep dropping, and even when we buy them at what we think is a low price, they drop further. Since the beginning of the year, it’s been nothing but stress. The banks are thoroughly screening customers, and there aren’t many buyers,” he said.
He described this period as the worst in his career. He has had to sell cars at a loss of hundreds of thousands of baht each to clear out his stock and maintain cash flow. He has also introduced promotions like zero down payments, two-year warranties, and 24-hour emergency assistance. For customers with good credit, there are even deals where they get some cash back.
Similarly, employees at various used car dealerships in Chiang Mai are live-streaming their sales pitches and offering numerous promotions, discounts, and after-sales services to attract customers. Despite these efforts, the used car market in Chiang Mai remains sluggish.
Boonthanom Phisut, the chairman of the Chiang Mai Used Car Dealers Association, likened the current state of the business to a boxer leaning against the ropes, battered by the economic conditions, a surge in repossessed vehicles leading to stricter financing, and intense price competition from new electric and gasoline cars. Only 1-2 out of 10 customers pass the financing screenings, and the fluctuating prices of used cars make sales even harder.
While the situation is dire for dealers, it presents an opportunity for consumers with purchasing power. Many buyers are finding high-quality used cars at significantly reduced prices.
The struggles of used car dealerships reflect broader trends in the Thai automotive market, including the growing market share of electric vehicles. As Thai consumers face reduced incomes and increased debt, the impact ripples through the entire economic system, forcing businesses across sectors to adapt for survival. (TNA)
