Thailand’s car rental sector shifts gears: 2023 growth outlook takes a modest dip of 2-3%
Thailand’s car rental sector is anticipated to witness a modest growth of 2-3% this year, as per Krungthai Car Rent & Lease Plc (Kcar). This is a step down from the previous annual growth of 4-5%, a dip attributed to numerous elements such as a stagnating economy, slow resurgence of tourism, diminished buying power, and escalating household debt.
Pichit Chantarasereekul, the managing director, elucidated that the Thai household debt has surpassed 90% of the nation’s GDP with public debt reaching 61% of GDP this year.
Pichit voiced his optimism for the newly formed government, expressing his hopes for them to expedite budget disbursement to bolster the economy. He also noted their potential role in initiating state development projects to spur growth.
Kcar predicts that long-term car rental in Thailand will experience a boost, extending from three to five years. This projection stems from the government and corporations, especially larger ones, desiring to cut costs. The company noted that these entities typically rent passenger cars for their executives and trucks or pickups for logistic needs.
The short-term car rental segment is gradually recovering from the pandemic’s impact. However, the growth rate remains slow due to its heavy reliance on the tourism industry.
Pichit also provided insight into the future of the used car business in Thailand, stating that it would likely decelerate owing to car manufacturers’ continuous launch of new models with enticing campaigns to stimulate sales.
He acknowledged the growing popularity of electric vehicles (EVs), although he expressed concerns about the rate of growth, citing worries about the availability of charging outlets and electricity rates. Despite this, Pichit recognised a budding demand for EVs in the rental car business.
Kcar is currently in discussions with Chinese EV manufacturers looking to explore business opportunities in the Thai market. The company leases around 9,000 cars, predominantly to large corporations, which constitute 85% of its clientele. Government agencies account for the remaining 15% of their customer base, reported Bangkok Post.
