Thailand's new vehicle market decline steepened further in September, with sales falling by 14.1% to 76,195 units from strong year earlier sales of 88,706 units, according to wholesale data compiled by the Federation of Thai Industries (FTI).
This is the fourth consecutive monthly decline for the market after more than two years of strong growth and reflects a sharp slowdown in GDP growth in the country to 2.3% year on year in the second quarter from 2.8% in the first quarter and 4.1% in the whole of 2018. Domestic consumption and investment has slowed significantly so far this year, while exports have declined.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The FTI also pointed to stricter car loan criteria introduced by banks earlier this year, which has resulted in a significant rise in loan rejections, as one of the reasons behind the recent market weakness. It added that loan tightening has affected small cars buyers particularly hard this year, including many first time buyers.
The federation also blamed severe flooding in parts of the country last month, which disrupted economic activity in the affected areas.
Total vehicle sales in the first nine months of the year were up by just 2.0% at 761,847 units compared with 746,584 units in the same period of last year, with a negative third quarter cancelling out most of the gains made in the first half of the year.
The federation expects the market to continue to weaken in the fourth quarter, but still expects full year sales to exceed 1m units in 2019.
Vehicle exports fell by 6.4% to 81,549 units in September and were down by 4.4% at 821,101 units in the first nine months of the year while vehicle production fell by 7.5% to 169,474 units last month and by almost 2% to 1.57m units year to date.
