* Domestic car sales seen rising for first time in 5 years
* 2017 sales may climb 6.7 pct to 800,000 cars - federation
* Sales hit a record in 2012, when car incentive scheme
By Orathai Sriring and Satawasin Staporncharnchai
BANGKOK, Dec 28 After years of falling domestic
sales, Thailand's auto industry is hoping 2017 will be a year of
recovery with the end of a five-year restriction on people
selling cars bought under a government subsidy scheme.
About 1.1 million vehicles were bought under the first-time
buyer scheme introduced in September 2011 by then-Prime Minister
Yingluck Shinawatra. Sales jumped 81 percent to a record 1.44
million cars in 2012, the year the subsidy ended.
While that was a welcome boost for an industry badly dented
by massive flooding in late 2011, its ban on people transferring
ownership for five years depressed demand. Car sales have fallen
each year since 2012.
"We expect up to 20 percent of those car buyers to replace
their cars once the lock-in period ends," Tanit Petra, managing
director of Mazda Petra, a major dealer for the Japanese
Domestic sales are projected at 800,000 cars in 2017, up
from this year's forecast 750,000 units, said Surapong
Paisitpattanapong, spokesman of the auto sector division of the
Federation of Thai Industries.
"Sales next year should get a boost from first-time car
buyers, by 30,000 cars," he said.
But the one-year mourning period for King Bhumibol
Adulyadej, who died on Oct. 13, and record household debt mean
the recovery may not be as strong as many had hoped.
NO BUYING MOOD?
"There is demand from first-time car buyers. But with the
mourning, people are not in the mood to buy now," said Tanit.
Thailand is a regional production base for global carmakers.
The auto industry accounts for about 10 percent of Thai GDP and
employs 10 percent of workers in manufacturing.
A pick-up in domestic demand would help counter softer car
exports. After hitting a record 1.2 million cars in 2015,
exports are expected to miss this year's 1.22 million target due
to tepid global demand and stronger competition, Surapong said.
Dhammatouch Thongaram of TMB Analytics said 5-10 percent of
first car buyers should seek new vehicles, "but that will depend
on their income and the economy, too."
The Bank of Thailand predicts GDP growth of 3.2 percent this
year and next, up from 2.8 percent last year. High household
debt is one reason why it has not cut rates since April 2015.
Consumer debt levels should fall as households repay car
loans, Don Nakornthab, a central bank senior director, told
"That should be good for consumption," he said.
($1 = 36.02 baht)
(Additional reporting by Kitiphong Thaichareon and Pairat
Temphairojana; Editing by Amy Sawitta Lefevre and Richard