Domestic auto sales are continuing to decline, raising concerns within the industry.
PUBLISHED : 25 Feb 2025 at 06:00
The Federation of Thai Industries (FTI) is urging the government to implement new measures aimed at revitalizing the domestic car market within the next two months, as sales, particularly in the pickup segment, continue to plummet.
Data shows a significant decline in pickup sales over the past two years, prompting manufacturers to cut production by over 200,000 units. This downturn has severely impacted workers in car factories and auto parts suppliers, according to a spokesperson for the FTI’s Automotive Industry Club.
The domestic car market’s slowdown has been primarily driven by weak consumer purchasing power and obstacles in securing auto loans against a backdrop of high household debt levels.
“While authorities indicated new measures would be rolled out in four months, we believe that timeline may be too delayed,” the spokesperson stated.
In response to market conditions, many automotive firms have reduced their workforce hours to 3-4 days per week and have cut wages to 75% of the full pay.
Strategies to combat stagnant sales should focus on addressing the debt crisis and sluggish economic growth, alongside a proposal for a 5-billion-baht fund aimed at enhancing consumer auto loan accessibility specifically for pickups.
This funding proposal was presented to the Prime Minister as part of efforts by the Joint Standing Committee on Commerce, Industry, and Banking to tackle the dismal state of domestic car sales.
The automotive sector is critical, contributing to 30% of Thailand’s GDP and employing 16% of the country’s total workforce.
In January, overall car sales declined by more than 12% year-on-year, totaling 48,092 units, while car exports fell by 28.3% to 62,321 units, marking the lowest level in 33 months.
The export decline is attributed to concerns surrounding potential tariffs on car imports into the U.S. and increased competition from cheaper car exports from China.
Additionally, Thailand’s total car production experienced a substantial drop of 24.6% year-on-year, amounting to 107,103 vehicles, as reported by the industry club.
