Thai car exports surge 12.2% in October despite domestic sales slump

Thai car exports witnessed a 12.2% surge in October, reaching 105,726 units, thanks to the escalating demand for pickups primarily in the Middle East. However, domestic sales didn’t keep pace, suffering from the burden of high household debt.

The Federation of Thai Industries (FTI)’s Automotive Industry Club reported robust sales in other markets last month, including Australia, Europe, North America, and South America. Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for the auto club, noted the growth potential in car exports, citing the improving economies of trading countries and strong consumer purchasing power overseas, unburdened by high household debt.

In contrast, the domestic market in Thailand is grappling with dwindling car sales due to high debt levels, forcing banks to impose stricter criteria for auto lending to mitigate the risk of non-performing loans. Domestic car sales dipped by 8.7% year-on-year to 58,963 units in October, with pickup sales experiencing a steep 37.9% drop.

The delay in state budget planning for fiscal 2024, contributing to an economic slowdown, was cited as another factor for the slump in sales. Surapong expressed hope that the upcoming 40th Bangkok International Motor Show, scheduled for November 29 to December 11, would stimulate domestic car sales.

The buoyant Thai car export market seems to be driving the Thai automotive industry. From January to October, car exports, featuring both cars with internal combustion engines and hybrid electric vehicles, rose by 15.8% year-on-year, hitting 927,625 units. The club anticipates reaching an export volume of 1.1 million units, valued at 1.1 trillion baht, in 2023, close to the 1.2 million vehicles exported in 2015.

Surapong envisages exports as a potential catalyst to boost Thailand’s car manufacturing. The club had earlier revised its car production target for the year down to 1.85 million units from 1.9 million units, following a decrease in domestic car sales, reported Bangkok Post.

In October, total car production in Thailand shrank by 7% year-on-year to 158,734 units. Manufacturing for export dipped by 3.5%, while production for domestic sales fell by 11.6%. The most significant decline was reported in the manufacturing of pickups.

However, the first 10 months of this year saw a slight 0.6% increase in total car manufacturing year-on-year, reaching 1.54 million units, according to the club’s data.