Weak economy and loan restrictions further plummets pickup sales

Domestic car sales are facing significant challenges as pure pickup sales dropped by 40.8% in the first five months of 2024, primarily due to a weak economy and difficulties in accessing loans, according to the Federation of Thai Industries (FTI).

From January to May, sales of pickup trucks fell by 40.8% year-on-year to 75,510 units. While sales of pickup passenger vehicles (PPVs) also saw a sharp decline, plunging 42% year-on-year to 16,255 units.

FTI Vice-Chairman, and spokesperson for the federation’s Automotive Industry Club, Surapong Paisitpatanapong spoke on the decrease in sales.

“The decrease in pickup sales has widely affected the automotive industry and auto parts makers along the supply chain.”

Surapong expects the combined sales of pickups and PPVs to total 150,000 units, falling short of the 2024 target of 200,000 units.

The FTI vice-chairman notes that around 400,000 pickups and PPVs are typically sold annually in Thailand. Even during the 1997 financial crisis, sales remained decent.

“Now the situation is worsening due to banks’ strict criteria in granting auto loans.”

Banks are exercising caution when lending money to prospective car buyers, fearing non-performing loans as household debt in the country remains high, with the household debt-to-GDP ratio in the nation currently standing at 91%, said Surapong.

“We hope state budget spending will help ease the unpleasant circumstances in the automotive industry.

“The country is waiting for new stimulus measures that can strengthen consumer purchasing power.”

Total car sales in the domestic market fell by 23.8% year-on-year to 260,365 units from January to May this year. During these five months, total auto manufacturing decreased by 16.8% year-on-year to 644,951 units.

This downward trend is prompting the Automotive Industry Club to consider downgrading Thailand’s car manufacturing output for 2024, which was initially forecast at 1.9 million units, with 1.15 million units produced for export and 750,000 units manufactured for domestic sales.

Car exports in May increased by 3.3% year-on-year to 89,284 units due to growing demand overseas. However, over the first five months of this year, exports fell by 2.2% year-on-year to 429,969 units, reported Bangkok Post.