BEV sales set to outstrip targets despite stricter loan criteria
The Federation of Thai Industries (FTI) predicts sales of battery electric vehicles (BEVs) to exceed the set target of 40,000 units, by reaching between 60,000 to 70,000 units this year. This surge is despite the stricter loan criteria by banks, which pose a potential threat to Thailand’s domestic car manufacturing.
According to Surapong Paisitpatanapong, vice-chairman of the FTI and spokesperson for the FTI’s Automotive Industry Club, the robust BEV sales are largely driven by Chinese imports, with their new models and marketing strategies resonating with Thai consumers.
“Chinese BEVs have dominated the EV market in Thailand and their sales are expected to keep growing.”
The club, however, anticipates a higher number of locally manufactured EVs to hit the market next year, considering the current low assembly rate in Thailand’s factories.
The increase in Chinese EV imports, coupled with the harder accessibility of car loans, prompted the club to consider reducing Thailand’s car manufacturing target in November, according to Surapong. Imported EVs have impacted the domestic production of traditional combustion engine-powered cars, which are witnessing a decline as the popularity of electric mobility technology escalates.
The reluctance of commercial banks to issue loans due to concerns about high household debt levels and potential non-performing loans has also been a factor. The club reports a decline in domestic car sales by 11.6% year-on-year in August, with pure pickup sales also dropping by 36.3%. This dip is mainly attributed to the financial institutions’ stricter loan issuance criteria.
Despite this, total car sales from January to August have marked a 6.2% year-on-year increase, reaching 524,784 units. If the club is compelled to adjust this year’s car manufacturing forecast, the new target will be less than 1.9 million units, induced by a fall in car production for the domestic market.
Previously, the club had already lowered its car production target from 1.95 million to 1.9 million, due to the sluggish domestic car sales following banks’ decision to tighten car loan criteria.
Domestic car manufacturing is projected to drop to 850,000 units from an earlier estimate of 900,000 units. However, the target for car exports remains unchanged at 1.05 million units, reported Bangkok Post.
Boosted by new orders from Australia, the Middle East, Europe, North America and South America, car exports in August rose by 29.4% year on year to 87,555 units. Consequently, car exports from January to August recorded a 19.5% year-on-year increase, amounting to 724,423 units.
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