Thailand's Car Production Hits a Four-Year Low

In a significant downturn, Thailand's car production has plummeted to 1.47 million units in 2024, marking a stark decrease from 1.83 million units in the previous year. This decline represents the 17th consecutive month of year-on-year contraction, with December's figures dropping by 17.4% to 104,878 units, as reported by the Federation of Thai Industries (FTI).

Domestic Sales and Exports Experience a Sharp Decline

Domestic sales have not been spared, witnessing a 26.2% fall to 572,675 units, the lowest in 15 years. This slump is attributed to weaker demand, exacerbated by banks tightening auto loan regulations amidst soaring household debt, according to Surapong Paisitpattanapong, spokesperson for the FTI’s automotive industry club.

On the export front, the scenario is equally grim, with a 8.8% decrease to 1 million units last year. Factors such as geopolitical tensions, the rise of electric vehicles (EVs), and stringent carbon emission policies in various countries have been cited as primary reasons for this downturn.

Looking Ahead: A Glimmer of Hope for 2024

Despite the challenges, the FTI projects a slight rebound in car production for 2024, estimating around 1.5 million units. This forecast includes 1 million units earmarked for export, with the remainder catering to the domestic market. The anticipated recovery is bolstered by increased EV production, spurred by state incentives, and a potential uptick in sales following government stimulus measures.

Thailand, recognized as Southeast Asia's largest automotive production hub and a key export base for global giants like Toyota and Honda, faces a pivotal year. The industry's resilience and adaptability will be crucial in navigating the evolving market dynamics and regulatory landscapes.

In a related development, luxury car sales in Thailand are expected to drop by 25% in 2024, reflecting the broader economic challenges impacting consumer confidence and spending power.