Thailand's new vehicle market declined by almost 27% to 59,335 units in July 2020 from strong year-earlier sales of 81,044 units, according to wholesale data compiled by the Federation of Thai Industries (FTI).
This follows a more than 50% fall to 128,540 units in the second quarter, when large parts of the economy were under lockdown to help control the spread of the COVID19 pandemic. The country's GDP shrank by over 12% in the second quarter, reflecting sharp declines in private consumption, investment and exports.
While the Thai government began to ease business and social restrictions in early May, key sectors of the economy remain under pressure, particularly those dependent on travel and tourism, and exports.
Sales of pickup-based vehicles fell by almost 16% to 32,707 units in July, while passenger car sales declined by close to 44% to 18,500 units and SUV sales were almost 8% lower at 5,049 units. Sales of commercial vehicles, excluding pickup-based vehicles, fell by close to 21% to 3,079 units.
Toyota reported an almost 32% plunge in sales to 17,508 units last month, according to separate sources; while Isuzu's sales increased by almost 12% to 15,477 units; Honda 6,034units (-45%); Mitsubishi Motors 4,920 (-31%); Nissan 4,000 units (-20%); Mazda 3,040 units (-44%); MG 2,312 (+30%); and Ford 2,323 (-42%).
Total vehicle sales in the first seven months of the year were down by close to 36% at 379,123 units from 588,877 units a year earlier. Last month the FTI cut its full-year sales forecast to between 500,000-700,000 units for 2020, depending on how quickly the COVID19 pandemic is brought under control, from 1,007,000 units in 2019.
Vehicle production in the country fell by almost 44% to 695,468 units year-to-date, while exports were down by almost 38% at 400,114 units.
Animesh Kumar, Director of Automotive Consulting at GlobalData, a leading research and consulting company, noted that tourism and exports play a significant role in the Thailand economy and both have been severely impacted due to the pandemic.
"The pandemic also resulted in country-wide movement restrictions, leading to disruptions in supply chain and automotive production. H1 2020 export and production declined 37.3% and 43.1%, respectively, year-on-year due to limited overseas demand amid COVID-19," Kumar said.
"The lockdown also kept potential buyers away from dealerships, which impacted the sales volumes. Since the easing of the lockdown restrictions, the vehicle sales have increased but they are much below 2019 levels," he said.
"Factors like lockdowns, decline in production and exports, decline in personal income levels during the pandemic, absence of stimulus/incentives by the government to boost vehicle sales can be blamed for the recent troubles. The state of the economy must also be taking a toll on the consumer sentiments. The Bank of Thailand in June predicted Thailand Gross Domestic Product to decline by 8.1% in 2020. In Q2 2020, the GDP declined by 12.2% year-on-year, which is the biggest decline since the Asian Financial Crisis of 1998.
"Against the backdrop, for a complete turnaround, Thailand must address issues including poor economic growth, political unrests, decline in FDI and decreased level of consumer confidence as well as private consumption. The Thailand auto sector is in immediate need of measures for demand-revival. The government needs to look at the suggestions made by the industry body, the Federation of Thai Industries (FTI), which include the introduction of scrappage policy, reduction of excise tax and delaying the implementation of Euro 5 emission standards in Thailand."
