Daily Newsletter

24 August 2023

Daily Newsletter

24 August 2023

Thai vehicle sales fall 9% in July

Thai market cooling in wake of interest rate rises

David Leggett August 24 2023

Thailand’s new vehicle market continued to decline in July 2023, by almost 9% year-on-year to 58,419 units from 64,033 a year earlier, according to the latest wholesale data released by the Federation of Thai Industries (FTI). The data excludes some key brands including BMW and Mercedes-Benz.

The vehicle market has drifted lower since the fourth quarter of last year, following an initial rebound from the Covid pandemic lows. While a rebounding tourism sector has helped the domestic economy recover strongly, interest rate hikes by the central bank over the last year - from 0.50 to 2.25% - and stricter lending rules have held back purchases of large items such as automobiles.

GDP growth came in at a much weaker than expected 1.8% year-on-year in the second quarter, compared with downwardly revised growth of 2.6% in the first quarter, due mainly to weaker exports and slower fixed investment growth.

Domestic vehicle sales in the first seven months of 2023 declined by just over 5% to 464,549 units from 491,329 units a year earlier, driven lower mainly by weak demand for pickup trucks and other commercial vehicles. The association last month cut its full-year domestic market forecast to 850,000 units from 900,000 units previously in response to the continued sales decline.

The Thailand Automotive Institute's (TAI), in a recent report, said it expected electric vehicle (EV) sales to reach 50,000 units this year, with demand being driven by recently launched models by Chinese brands and also by Chinese-made Teslas.  

Vehicle production in the country rose by 6% to 1,051,221 units in the seven-month period, driven by a 20% rise in production for export to 636,868 units as domestic vehicle manufacturers fulfilled order backlogs following last year’s supply chain shortages.

Tyres and exhaust systems expected to dominate the automotive aftermarket industry

Today’s consumers have a great desire to customize and distinguish their vehicles. The demand for aftermarket extras, including specialized wheels, performance upgrades, interior renovations, audio systems, and aesthetic alterations, has increased owing to this trend. Per GlobalData estimates, the global automotive aftermarket industry will be valued at $677 billion in 2023 and is expected to grow at a CAGR of 5.8% by 2030.

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