Revving up: Thailand’s car production to rise by 3.17% in 2024, predicts FTI

The Federation of Thai Industries (FTI) predicted a 3.17% rise in Thailand’s car production this year, reaching an estimated total of 1.9 million units. This projection comes despite the less-than-anticipated total car production of 1.84 million units last year, falling short of the 1.85 million units target.

According to Surapong Paisitpatanapong, Vice-Chairman and spokesperson for the FTI’s Automotive Industry Club, car production for export is forecasted at 1.15 million units in 2024. Domestic sales are also expected to contribute to the total with an estimated 750,000 units.

“Should the government’s stimulus measures successfully augment purchasing power, the economy in 2024 is projected to improve.”

However, he also shared concerns about potential obstacles for Thai manufacturers aiming to sell their cars abroad. Countries such as Laos have introduced higher excise taxes on cars, a move that could impact exports. The global economic slowdown and geopolitical conflicts, including the Russia-Ukraine war and the tensions in the Red Sea, are also anticipated to affect the global supply chains.

The FTI reported a 15.7% year-on-year decrease in Thailand’s car production in December last year, with a total of 133,621 units. This decline was tied to banks enforcing stricter criteria for car loans, a response to worries about the high level of household debt in Thailand. Moreover, an influx of electric vehicle (EV) imports from China has also influenced the domestic car manufacturing industry.

Recognising the rising trend of EVs, the government is actively promoting the industry. Incentive packages for EVs have been introduced, including subsidies, decreased import duties for fully assembled cars, and tax cuts for car manufacturers.

Meanwhile, domestic car sales in December also saw a reduction, with a 17.4% year-on-year decrease to 68,326 units. However, Thailand’s car exports from January to December 2023 experienced an 11.7% year-on-year increase to 1.11 million units, with internal combustion engine-powered cars accounting for 1.1 million units of this total. This surge in exports resulted in a 15.2% year-on-year increase in export value, amounting to approximately 719 billion baht, reported Bangkok Post.