Thai car market hits speed bump, FTI urges govt to drive recovery
The Federation of Thai Industries (FTI) is urging a turbocharged response from the government to rev up the nation’s sputtering car market. Demand for motors has hit a roadblock, with a particular skid in pickup truck sales.
According to January’s numbers, it’s been a bumpy ride, causing manufacturers to slam the brakes on production by more than 200,000 units over the past two years. This has left workers in manufacturing plants and auto parts suppliers on a precarious edge, said Surapong Paisitpatanapong, the FTI Vice Chairman.
The slowdown in car sales stems from weak consumer spending power and a struggle to secure auto loans, thanks to Thailand’s soaring levels of household debt, said Surapong.
“Authorities earlier said they would implement new measures within four months, but we think that may be too late.”
In a desperate bid to cut costs, automotive firms have reduced workers’ hours to three-four days a week and slashed wages to 75% of the norm.
Surapong suggests that resuscitating the market requires tackling the debt issue and sluggish economic growth, coupled with a bold proposal for a 5-billion-baht fund to boost consumer loans in the ailing pickup segment.
The proposal, laid before Prime Minister Paetongtarn Shinawatra by the Joint Standing Committee on Commerce, Industry, and Banking, aims to put the brakes on the plummeting car sales that have left the industry in dire straits.
The sector is a significant player in Thailand’s economy, representing 30% of GDP and providing jobs for 16% of the national workforce.
The January figures paint a grim picture: overall car sales nosedived over 12% year-on-year to 48,092 units, while exports took a tumble by 28.3% to just 62,321 units, the lowest in 33 months.
The drops in exports are largely linked to fears over US President Donald Trump’s looming tariff plans on imports and competitive pricing from Chinese car exports.
Last month’s production figures didn’t buck the trend either, plummeting 24.6% year-on-year to 107,103 vehicles, as reported by the Automotive Industry Club.
The FTI is betting on swift governmental intervention to navigate out of these rough waters and put the domestic car market back on track!
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