EV and SUV sales set for boost in Thailand amid automotive industry changes

This year, the automotive industry anticipates uneven sales growth, shaped by motorists’ evolving preferences and lenders’ decision-making. Electric vehicle (EV) makers and banks will be crucial in shaping domestic sales, especially within the pure pickup category. As per the Federation of Thai Industries (FTI), EVs, pickup passenger vehicles (PPVs), and sport utility vehicles (SUVs) are predicted to be this year’s buyer trends.

Surapong Paisitpatanapong, the FTI’s Automotive Industry Club Vice-Chairman and spokesperson, stated that banks’ stringent loan grant criteria would significantly affect pure pickup sales. He asserts that an increase in sales for this segment is unlikely as long as financial institutions remain concerned about non-performing loans. The stricter loan criteria led to a nearly 45% year-on-year drop in pure pickup sales in December 2023.

However, Surapong is hopeful that government measures to boost the economy could instil business confidence and enhance consumer purchasing power, leading to a recovery in the pure pickup segment’s domestic sales.

SUVs and PPVs are projected to see increased sales this year due to their affordable prices and superior driving performance. Surapong believes that SUV sales will rise domestically and for exports as more people can afford these vehicles, a change from the situation four-five years ago. Prices have dropped below 1 million baht due to new models from Chinese companies prompting a price war in the SUV segment.

In addition to SUVs, the EV category is also expected to witness a price war due to intensifying competition. Chinese car companies disrupted the local market last year by introducing a variety of EV types and sizes, with some models priced similarly to internal combustion engine (ICE) cars. This move has raised concerns among rival automakers, particularly the Japanese firms that have long dominated the Thai market.

The Thai government’s efforts to promote eco-friendly cars and provide incentives to EV manufacturers have contributed to the increased popularity of EVs. The government’s EV roadmap from 2022 to 2030 aims for BEVs to constitute 30% of total car manufacturing by 2030. This goal includes the production of 725,000 zero-emission cars, 675,000 electric motorcycles, and 34,000 electric buses and trucks, reported Bangkok Post.

Chinese automakers

Chinese automaker Great Wall Motor opened its Thai EV factory in January. The plant, located in Rayong, has a total capacity of 120,000 units a year, with the company aiming to initially produce 80,000 vehicles a year. Meanwhile, BYD plans to operate its first BEV factory in Southeast Asia in 2024 in Rayong, with an annual production capacity of 150,000 units.

The previous government’s EV incentive package, known as EV3.0, included tax cuts and subsidies to promote EV consumption and production between 2022 and 2023. In December last year, the cabinet approved a new EV incentive package, known as EV3.5, to propel automotive industry growth between 2024 and 2027. The package includes subsidies, reduced import duties for fully assembled cars, and an excise tax cut.

By 2030, Thailand’s car manufacturing capacity is expected to reach 2.5 million units, with zero-emission vehicles making up 750,000 units and ICE cars representing 1.75 million units. FTI expects EV sales in the domestic market to reach 90,000-100,000 units in 2024 as drivers’ lifestyles change. FTI also predicts that competition in the EV market will increase as car companies continue to launch new models with smart technology, sleek designs, and attractive prices.