Thai domestic car sales slump hits 26% as pickup sector suffers

The Federation of Thai Industries (FTI) reported a 26% year-on-year drop in domestic car sales for February, primarily affecting the pickup sector. This downturn is expected to hit a two-year low. The total number of cars sold in the country came to 52,843 units, a significant drop from the previous year’s 71,551 units.

Despite the worrying sales slump, Surapong Paisitpatanapong, FTI Vice-Chairman and spokesperson for its Automotive Industry Club, remains optimistic about potential economic improvements. These improvements are anticipated as a result of state budget spending in the latter half of this year.

Last week, the House of Representatives approved a 3.4-trillion-baht (US$93 billion) budget bill for fiscal 2024, which started on 1 October last year. The budget’s approval had been delayed due to the lengthy process of forming a new coalition government after the General Election.

Surapong also predicts that the government will introduce further stimulus measures to boost the economy, which should, in turn, improve domestic car sales to some degree.

Meanwhile, the nation’s car production for the month fell by 19.2% year-on-year, totalling 133,690 units. Production for both export and domestic sales saw dips of 9.2% and 32.9% respectively, the Automotive Industry Club reports. The decline is attributed to a shortage of certain components required for pickup manufacturing, coupled with lower domestic sales.

The production of passenger cars has also been reduced as imports of electric vehicles (EVs), mainly from China, have started gaining market share. The production of pickups has slowed due to banks imposing stricter loan criteria for potential pickup buyers.

Surapong cites difficulties in securing finance as a major hurdle to pickup sales, as banks exercise caution due to high household debt, which could increase non-performing loans.

“Pickups are a real concern. In the past, pickup sales were higher than those for passenger cars. Now their sales volume continues to decrease.”

For the first two months of this year, domestic car sales have fallen by 21.4% year-on-year, equating to 107,657 units, according to data from the club, reported Bangkok Post.