FTI Set to Announce Revised Automotive Production Goals Soon
Thailand’s automotive sector is facing significant challenges, with total car manufacturing projected to fall short of 1.7 million units in 2024. The anticipated decline comes as domestic sales and exports have plummeted, leading the Federation of Thai Industries (FTI) to contemplate a second downward revision of production targets this year.
FTI’s Automotive Industry Club is scheduled to meet later this month to discuss these adjustments, with an official announcement expected in November, according to FTI Vice-Chairman and spokesperson.
Earlier this year, the club had already revised its target from 1.9 million units—a modest 3.15% increase from 2023—to a decreased goal. The projection for domestic car production has been scaled back to 550,000 units from 750,000 units, while export manufacturing remains at 1.15 million units.
“We may need to further reduce domestic production targets, as well as export figures,” the spokesperson noted, highlighting the adverse effects of lowering export figures on the industry.
Recent data shows that car exports fell by 17.6% year-on-year in September, totaling 80,254 units. From January to September, exports dropped by 6.4% year-on-year, with a total of 768,887 units exported.
In June, the decline in exports was only minimal, at 0.28% year-on-year, with first-half year exports down by 1.8% year-on-year, reaching 519,040 units. The spokesperson attributed the September drop in exports to an economic slowdown in international markets and escalating geopolitical tensions in the Middle East.
Exports to major markets, including the US, Mexico, and several European and Asian countries, have all seen declines.
Domestically, car sales also continued to struggle, with a dramatic 37.1% decrease year-on-year in September, resulting in sales of 39,048 units. This downturn can be largely attributed to stringent auto loan criteria from banks in light of high household debt levels.
“This figure represents the lowest sales we’ve recorded in over four years, since April 2020,” noted the spokesperson.
While the overall value of auto loans is declining, the issue of non-performing loans persists, causing lenders to exercise caution in granting new auto loans, with rejection rates between 50% and 60% of applications.
For the first nine months of the year, domestic car sales experienced a significant 25.2% drop year-on-year, totaling 438,659 units, while total manufacturing decreased by 25.4% year-on-year to 122,277 units in September and fell by 18.6% to 1.12 million units over the nine-month period.
