Thailand’s auto industry skids as production plummets 24.63%

Weak domestic sales, tighter lending and fierce EV competition have pushed exports to a 33-month low as industry leaders call for swift action

 

Thailand's car industry is suffering a sharp downturn, with production in January dropping 24.63% year-on-year, a Federation of Thai Industries (FTI) report released on Monday shows.

 

The slump in exports, partly driven by rising competition from Chinese electric vehicles, has pushed the sector to a 33-month low, prompting calls for urgent government intervention. 

 

The FTI report showed a total production of 107,103 automobiles in January, marking a substantial decline from the same period last year. Exports and domestic sales have also suffered, falling by 21.10% and 31.78%, respectively.

 

Though 75,044 units or 70.07% of the total production was for export, it still marked a 21.10% drop year-on-year. Production of automobiles for the domestic market was worse, with only 32,059 units produced marking a 31.78% drop. Of the total units produced and in stock, only 48,092 units were sold domestically, marking a 12.26% reduction.

 

The FTI has attributed this slump to a combination of factors, including tighter lending conditions due to high household debt, Thailand’s sluggish GDP growth of just 2.5% in 2024 as well as reduced incomes and spending power. 
 

 

  

Exports of completely built units (CBUs) were particularly hard hit, falling 28.13% to 62,321 units, the lowest in 33 months.

 

Concerns over trade wars, especially higher US import tariffs and stiff competition from cheaper Chinese electric vehicles were cited as key factors for the slump. 

 

Delays in model updates and reduced production in January due to the yearend holiday season also contributed to the export slump, affecting markets in Australia, the Middle East, Europe, as well as Central and South America.

 

The overall value of automotive exports, including CBUs, engines, parts, motorcycles and related components, dropped 20.63% to 68,069.18 million baht.

 

Even the electric vehicle sector suffered a slowdown. While cumulative BEV registrations rose 63.85% year-on-year, new registrations in January dropped 7.73% to 14,711 units.
  

Surapong Paisitpattanapong, spokesperson for FTI's automotive industry division, said it is time for the government to take swift action and introduce measures like reducing the car loan guarantee period for pickup trucks from four to two months. He said measures like this would stimulate production, create jobs and boost economic growth. 

 

“It will also create a more favourable investment climate,” he added.

(2025/02/24-00:00)