PUBLISHED : 25 Dec 2024 at 05:53
The Federation of Thai Industries (FTI) is optimistic that car manufacturing output will hit the newly established lower target for 2024, despite a notable decline in domestic car sales and exports observed in November.
This downturn stems from ongoing challenges in consumers’ access to auto loans, which are projected to continue into the next year, according to Surapong Paisitpatanapong, vice-chairman of the FTI and spokesperson for the Automotive Industry Club. The club recently revised its car production target down to 1.5 million vehicles for 2024, a significant reduction from the previous target of 1.7 million, the lowest benchmark since 2021. This marks the second downward adjustment following a revision in July, when the target was cut from 1.9 million to 1.7 million.
From January to November, the total car production saw a decline of 20% year-on-year, totaling 1.36 million vehicles. Specifically, car manufacturing in November fell by 28% year-on-year, with production for domestic sales down by 40% to 37,229 units, and export production decreasing by 20.6% to 80,022 units.
Despite a general downturn in car sales, plug-in hybrid electric vehicles recorded a significant year-on-year increase of 346% to 223 units, although they accounted for just 0.53% of total car sales.
Internal combustion engine-powered vehicles held the largest market share at 28.3%, followed closely by pure pickups at 27.1% and hybrid electric vehicles at 17.9%. The sales slump in November was linked to a sluggish economic growth of 3% in the third quarter, compounded by stringent lending criteria from banks and car financing companies amid high household debt levels.
The approval rate for auto loans was a mere 3% of total applications in the third quarter, which also saw a 22.8% rise in non-performing auto loans compared to the previous year. Surapong noted that the continued seizure of pickups due to borrowers’ financial strains has detrimentally affected their sales.
Domestic car sales from January to November decreased by 26.6%, totaling 518,659 units. Car exports also suffered, dropping by 10% year-on-year to 89,646 vehicles in November, influenced by geopolitical tensions and economic sluggishness in China, although there was a slight increase observed in North American markets.
For the period of January to November, car exports decreased by 8.2% year-on-year, reaching 942,867 units. Looking ahead, Surapong anticipates that car sales, exports, and manufacturing in 2025 will mirror this year’s numbers, emphasizing the necessity of a 4-5% growth in Thai GDP to stimulate both the economy and the automotive sector.
