Thailand’s new vehicle market dropped by a further 30% to 56,099 units in March 2024 from 79,943 a year earlier, according to the latest wholesale data released by the Federation of Thai Industries (FTI).

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

The market had been in decline for over a year, after an initial rebound from the Covid pandemic, with sales falling 9% to 775,780 units in 2023.

The country’s heavily indebted consumers and small businesses were struggling with the central bank’s interest rate hikes over the last 18 months from 0.5% to 2.5%, while vehicle financing companies had also tightened their lending criteria.

In the first quarter of 2024, vehicle sales were down 25% at 163,756 units from 217,076 in the same period of last year with particularly weak demand for pickup trucks continuing to drive the market lower.

Thailand was now south east Asia’s third largest vehicle market after Indonesia and Malaysia but remained the region’s largest vehicle producer despite first quarter output falling 18% year on year to 414,123 units.

At the Bangkok International Motor Show, which ended earlier this month, automakers reported 58,610 new vehicle orders, a 27% increase compared with last year.

This could be an indication that the market may be beginning to improve.

Orders for battery electric vehicles (BEVs) at the show reached 17,520 units, according to local reports, with Chinese manufacturers such as BYD accounting for most of these. Most BEVs sold in Thailand so far were imported assembled from China with local production expected to be ramped up this year.

Speaking at the show, Hyundai Mobility Thailand’s Wallop Chalermvongsavej said he now expected total BEV sales in Thailand to reach 100,000 units this year, up from 78,000 last year.

Last February, the Thai government announced new incentives aimed at increasing sales of battery powered commercial vehicles, including trucks and buses, to encourage local production and establishment of supply chains.