Image: Tom Fisk
Thailand’s automotive sector faces a significant downturn in 2024, with the Federation of Thai Industries (FTI) projecting annual vehicle production to hit 1.5 million units, marking the lowest output since 2021’s pandemic-affected figures.
Speaking at a briefing today, November 25, FTI automotive industry group spokesperson Surapong Paisitpatnapong announced this second downward revision of the year. The federation had previously lowered expectations in July from 1.9 million to 1.7 million units.
The Thai automotive market is struggling under the weight of mounting challenges. Banks have become increasingly cautious with auto loans, responding to climbing bad debt rates and household debt levels that now exceed US$500 billion.
Prime Minister Paetongtarn Shinawatra’s government is currently developing strategies to address this economic burden.
The FTI has also significantly reduced its export predictions, dropping from 1.15 million to 1.05 million vehicles. Similarly, domestic production targets have been cut from 550,000 to 450,000 units.
Surapong identified two primary challenges: restricted bank lending, particularly affecting pickup truck sales, and disruptions to automotive exports due to ongoing Middle East conflicts.
Recent data underscores these concerns, with October showing stark declines across both domestic and international markets. Domestic auto sales plummeted 36% year-over-year to 37,691 units, while exports dropped 20.2% to 84,334 units compared to the previous year, reported Bangkok Post.
In similar news, Thailand’s auto industry is stuck in first gear, with car production now expected to fall short of the 1.7 million target for 2024 as sales and exports hit a serious slump.
The Federation of Thai Industries (FTI) warns that car manufacturing could face another downgrade this year, with officials predicting a sharp drop from the original target of 1.7 million units.
In other news, Thailand is set to adjust its automotive excise tax structure to reflect the global shift towards electric vehicles (EVs), according to Deputy Finance Minister Paopoom Rojanasakul.
This move aims to harmonise local policies with international trends in the automotive industry, particularly as the competition between battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) intensifies.
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