PUBLISHED : 25 Dec 2024 at 05:53
The Federation of Thai Industries (FTI) is maintaining optimism for the automotive sector despite a notable drop in domestic car sales and exports in November. The forecast for 2024 has been adjusted to a production target of 1.5 million vehicles, the lowest since 2021, due to ongoing issues with consumer access to auto loans.
Surapong Paisitpatanapong, vice-chairman of the FTI, indicated that the stagnant market conditions are likely to persist into the next year. The automotive industry club’s initial target was revised from 1.9 million to 1.7 million earlier this year before this latest reduction.
Year-to-date figures reveal a 20% decline in total car production, totaling 1.36 million vehicles from January to November.
In November alone, production decreased by 28% year-on-year, with domestic sales dropping 40% to just 37,229 units and exports declining by 20.6% to 80,022 units.
The only segment witnessing growth was plug-in hybrid electric vehicles, which surged 346% year-on-year to 223 units, yet represented only 0.53% of total sales.
Internal combustion engine cars continue to dominate the market at 28.3%, followed by pickups at 27.1% and hybrid vehicles at 17.9%.
The drop in sales has been linked to a slow economic growth rate of 3% in the third quarter, combined with tightened auto loan approval criteria amidst high household debt levels.
Loan approvals were limited to just 3% of applications in the third quarter, coinciding with a 22.8% increase in non-performing auto loans year-on-year.
From January to November, domestic car sales experienced a significant decrease of 26.6%, amounting to 518,659 units.
Similarly, car exports were down 10% year-on-year in November, totaling 89,646 vehicles, impacted by geopolitical tensions and economic struggles in China, though North America saw a slight increase in sales.
For the period from January to November, car exports decreased 8.2% year-on-year to 942,867 units.
Looking ahead, Mr. Surapong anticipates that automotive sales, exports, and manufacturing will remain stable in 2025, contingent upon a Thai GDP growth of 4-5% to enhance the economic environment for the automotive sector.
