Thailand’s automotive production continues facing downturn

Thailand’s annual vehicle production is projected to hit 1.5 million units this year, marking the lowest output since 2021, according to the Federation of Thai Industries (FTI).

FTI automotive industry group spokesperson Surapong Paisitpatnapong announced the federation has lowered its expectations for Thailand's automotive production for the second time this year due to unfavourable domestic conditions and signs of weakening exports.

In July, FTI cut its outlook to 1.7 million vehicles from its previous forecast of 1.9 million vehicles.

The Thai automotive market is struggling under the weight of mounting challenges. Banks have become increasingly cautious with auto loans, responding to climbing bad debt rates and household debt levels that now exceed 500 billion USD.

Thai Prime Minister Paetongtarn Shinawatra’s government is currently developing strategies to address this economic burden.

The FTI has also significantly reduced its export predictions, dropping from 1.15 million to 1.05 million vehicles. Similarly, domestic production targets have been cut from 550,000 to 450,000 units.

Surapong said the bank's tightening of lending conditions, especially for pickup trucks, continues to put pressure on domestic car sales, while the escalating unrest in the Middle East is also hurting car shipments.

In October alone, domestic auto sales plummeted 36% year-over-year to 37,691 units, while exports dropped 20.2% to 84,334 units compared to the previous year.