Thailand’s automobile industry faced a significant downturn in July 2024, with production dropping by 16.62 per cent to 124,829 units. This decline marks the 12th consecutive month of reduced output and underscores ongoing challenges within the sector.
According to the Federation of Thai Industries (FTI), production from January to July 2024 has decreased by 17.28 per cent year-on-year with a total of 886,069 units. This persistent drop is largely attributed to weakening domestic sales, particularly for pickup trucks.
Surapong Paisitpattanapong, the spokesperson for the FTI’s automotive industry division, highlighted the impact of tighter auto loan regulations.
“The substantial reduction in domestic sales, especially for pickup trucks, has been a major contributor to the ongoing contraction in production,” he stated.
“Stricter auto loan requirements imposed by banks, due to increased household debt, have led to a 20.58% drop in domestic car sales in July compared to the previous year,” he added.
Revised Forecasts Amidst Industry Challenges
Thailand, which is a key automotive manufacturing hub in Southeast Asia, plays a crucial role for major car manufacturers like Toyota and Honda. Despite its prominence, the industry is currently grappling with significant challenges.
The FTI has recently adjusted its forecasts in response to the current market conditions. The domestic sales projection for 2024 has been lowered from 750,000 to 550,000 vehicles. They have also revised the production target for the year downward from 19 million to 17 million units. This marks a notable decrease from the 1.84 million vehicles produced in 2023.
This updated outlook reflects the sector’s struggle to adapt to economic pressures and shifting market dynamics. The ongoing reduction in production highlights the broader issues affecting Thailand’s automotive industry. The sector must navigate these challenges while striving to maintain its critical role in the global automotive supply chain.
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