Thailand’s Automotive Industry Faces Major Decline Amid Tough Conditions
Thailand’s automotive industry is in decline, with a 24.63% drop in production year-on-year in January, attributed to weak domestic sales, tighter lending, and fierce competition from Chinese electric vehicles. Exports have fallen to a 33-month low, prompting calls for government intervention to stimulate the sector amid ongoing economic challenges.
Thailand’s automotive sector is facing a significant downturn, with January production dropping by 24.63% year-on-year. A report by the Federation of Thai Industries (FTI) indicates that weak domestic sales and intense competition from Chinese electric vehicles have caused this decline, leading to the lowest export levels in 33 months.
The FTI report noted that total automobile production reached 107,103 units in January, a notable decrease compared to the previous year. Exports fell by 21.10% and domestic sales plummeted by 31.78%. Notably, out of total production, 75,044 units, or 70.07%, were allocated for export, reflecting the trend in declining exports.
Domestic production faced a more severe setback, with only 32,059 units manufactured, translating to a 31.78% reduction. Of the units produced, domestic sales further declined by 12.26%, totaling 48,092 units sold. The FTI attributes these declines to stringent lending conditions, high household debt, and sluggish GDP growth of 2.5% projected for 2024.
Exports of completely built units (CBUs) suffered a significant drop of 28.13%, hitting a record low of 62,321 units. Factors contributing to this slump include intensified trade tensions, increased US tariffs, and competition from affordable Chinese electric vehicles. The holiday season also delayed production schedules, affecting major markets like Australia, Europe, and Central America.
The overall automotive export value decreased by 20.63%, reaching 68,069.18 million baht. Even the electric vehicle sector felt the impact, as while cumulative battery electric vehicle (BEV) registrations saw a rise of 63.85% year-on-year, new January registrations dropped by 7.73%, totaling 14,711 units.
Surapong Paisitpattanapong, the spokesperson for the FTI’s automotive division, urged the government to take quick action. He suggested reducing the loan guarantee period for pickup trucks to stimulate production, which would foster job creation and enhance the investment climate. “It will also create a more favorable investment climate,” he emphasized.
The downturn in Thailand’s automotive industry is marked by a steep decline in production and sales, influenced by domestic economic conditions, tighter lending, and rising foreign competition. Industry leaders advocate for government intervention to revitalize the sector, particularly through measures to improve lending conditions, which could stimulate production and economic growth. Without such actions, the industry risks further decline amid evolving market challenges.
Original Source: www.nationthailand.com
