Thailand’s new vehicle market continued to deteriorate in September 2024, with sales plunging by 37% to 39,048 units from 62,086 units a year earlier, according to the latest wholesale data released by the Federation of Thai Industries (FTI).
The market has been in decline for almost two years, after a brief rebound from the Covid pandemic lows in 2022. Last month was the first time since mid-2020, at the peak of the Covid lockdowns, that monthly sales have dropped below 40,000 units. FTI spokesperson Surapong Paisitpattanapong said the market is being driven lower by high levels of auto loan rejections, estimated at around 60% of applications, as banks look to reduce non-performing loans which they claim have risen sharply in the last two years.
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Overall economic activity in the country accelerated to 2.3% year-on-year in the second quarter compared with 1.6% in the first quarter, due mainly to stronger exports. Private consumption growth slowed to 4.0% from 6.9%, despite strong growth in the country’s tourism sector, as domestic consumer sentiment continued to weaken – reflecting high household debt currently estimated at around 90% of GDP.
Thailand is now South-east Asia’s third-largest vehicle market after Indonesia and Malaysia, with sales falling by 25% to 438,654 units in the first nine months of 2024 from 586,870 in the same period of last year, according to FTI data. Demand for pickup trucks, which are used extensively by small business owners, have been particularly weak this year.
Sales of battery electric vehicles (BEVs) fell by 7% year-on-year to 6,606 units in September, while year-to-date volumes were still up by 12% at 75,653 units. The National Electric Vehicle Policy Committee this month urged the government to ease incentive-related BEV manufacturing requirements by allowing manufacturers, mainly Chinese companies, to reduce their production targets due to sluggish demand.
In the last year Chinese automakers including BYD, GAC Aion, Hozon and Great Wall Motors have begun BEV and hybrid vehicle production at newly-built plants in the country. Toyota and Isuzu are scheduled to launch battery-powered pickup truck production next year.
Thailand remains the region’s largest vehicle producer, despite overall output falling by 19% to 1,128,026 units in the first nine months of 2024, while production for export fell by 4% to 774,175 units.
