BANGKOK SEATIZENS – Thailand’s auto industry remains stuck in first gear, with car production now expected to fall short of the 1.7 million target for 2024 as sales and exports hit a serious slump.The Federation of Thai Industries (FTI) warns that car manufacturing could face another downgrade this year, with officials predicting a sharp drop from the original target of 1.7 million units.
Thailand’s Auto Industry Faces Further Downgrade Amid Production Slump
ACCORDING THAIGER , Discussions among FTI members later this month will likely lead to a formal announcement in November, according to Surapong Paisitpatanapong, FTI Vice-Chairman and spokesperson for the Automotive Industry Club.
The outlook for Thailand’s auto sector has steadily worsened this year. In July, the FTI had already reduced its production forecast from 1.9 million units, initially predicting a modest 3.15% increase over 2023.
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Thailand’s Auto Industry Faces Production and Export Challenges
The adjusted target slashes domestic production expectations to 550,000 units while holding exports steady at 1.15 million units. Now, even export goals may need revision, as global markets remain under pressure.
Car exports plummeted by 17.6% in September compared to the same period last year, reaching just 80,254 units. Overall, exports dropped by 6.4% in the first nine months of 2024, a concerning contrast from earlier in the year when the decline was just 0.28% in June.
Economic uncertainty in major markets and increased tension in the Middle East contributed to the slowdown. Exports to key markets, including the US, Mexico, Germany, Japan, and several ASEAN countries, saw notable declines.
The situation isn’t much better at home. Domestic car sales nosedived by 37.1% year-on-year in September, reaching their lowest level since April 2020 at just 39,048 units. Rising household debt and stricter bank lending policies are seen as primary culprits, with 50-60% of auto loan applications facing rejection.
Over the first nine months of 2024, domestic sales plummeted by 25.2% year-on-year to 438,659 units, while total manufacturing output fell by 25.4% in September alone, leaving production for the year down by 18.6%.
As banks tighten lending amidst a surge in non-performing loans, the car industry faces an uphill battle. With fewer loans approved, dealerships and manufacturers alike are bracing for a rough road ahead.
(BEAM CHAYAPON)
