The Thai domestic vehicle market will likely decline by a further 5% this year after a more than 21% drop in 2020, the Federation of Thai Industries (FTI) said.

It is forecasting domestic sales to reach 750,000 units in 2021, down from 792,146 last year, with the recent COVID-19 outbreaks around the world expected to hold back economic activity in the country.

The FTI said it expected vehicle production to rise by just under 6% to 1.5m units from 1.42m last year, lifted by a moderate rise in exports which are forecast to account for around half of total output.

Surapong Paisitpattanapong, spokesperson for the FTI's automotive industry division, said: "We are still worried about second and third coronavirus waves in some countries, while Thailand now is experiencing a second wave."

Surapong added the local automotive industry was struggling with a shortage of semiconductors which may further hold back exports over the full year after declining by over 30% in 2020.

He added: "There is also a shortage of chips, forcing some carmakers stop production temporarily."

Thailand auto sales and production to stabilise in 2021 - analyst

Thai sales fall 21% in 2020