New vehicle sales in Thailand fell 8% to 79,943 units in March 2023 from strong year earlier volume of 87,245 units, according to the Federation of Thai Industries (FTI).

The data excluded some key brands, including BMW and Mercedes-Benz.

The Thai domestic market continued to slow last month with consumer spending affected by rising interest rates while weak exports also put pressure on the economy. The main bright spot remained travel and tourism which continued to rebound from the Covid lockdowns.

First quarter GDP growth was expected at 2.8% after dropping to 1.4% in Q4 2022, with full year growth forecast between 2.7% and 3.7%, driven by a rise in domestic consumption in the second half of the year as inflation eases.

Overall Q1 domestic vehicle sales were down 6% to 217,076 units from 231,189 in Q1 2022 with sales of passenger vehicles up by 8% at 122,812 units while pickup truck sales plunged 21% to 84,130 units and sales of other vehicles including commercial vehicles fell 8% to 10,134.

Local vehicle production rose 6% to 507,787 units year to date, driven by a 12% rise in exports to 288,130 units.

Surapong Paisitpatanapong, vice-chairman of the FTI, said the increase in vehicle output was helped by improving supplies of semiconductors.

The FTI now expected total vehicle production to increase at least 6% to around 2m units in 2023 from 1.88m last year with 1.1m exports and 900,000 domestic sales.

It forecast sales of electric and hybrid vehicles to reach 30,000-40,000 units this year, boosted by the recent entry of Chinese brands such as BYD.