Thailand Automotive Output Sees Significant Decline in September 2023

Thailand’s automobile production fell by 25.5% in September 2023, with domestic car sales dropping 37.1% and export sales declining by 10.8%. This slump is primarily attributed to tighter credit conditions and increased non-performing loans, alongside economic issues with trading partners. Thailand remains a prominent auto production hub in Southeast Asia, impacting global manufacturers such as Toyota and Honda.

The Federation of Thai Industries (FTI) announced on Friday that Thailand’s automobile production saw a significant decline of 25.5 percent in September compared to the same month last year. This steep decrease is attributed to a downturn in domestic automobile sales, which are hindered by stricter credit conditions imposed by lenders. The FTI reported that non-performing loans for vehicles surged to 254 billion THB (approximately US$7.5 billion) in the second quarter of 2024, reflecting a year-on-year increase of 29.7 percent. According to Surapong Paisitpattanapong, a spokesperson for the FTI’s automotive division, car sales in Thailand plummeted by 37.1 percent, amounting to 117,000 units sold in September. Additionally, exports experienced a 10.8 percent decline year-on-year, driven by economic challenges faced by trading partners and the ramifications of ongoing conflicts in the Middle East. Thailand remains a key hub for automobile manufacturing within Southeast Asia and serves as an export base for leading automotive brands, including Toyota and Honda.

Thailand is recognized as Southeast Asia’s foremost center for automobile production, playing a critical role in the supply chains of major global car manufacturers. The country’s automotive sector has historically thrived due to robust domestic demand and significant export capabilities. However, recent economic shifts and tightening financial conditions have drastically affected production and sales in this crucial sector. Stricter lending practices and rising non-performing loans signal a challenging environment for consumers seeking automobile financing, contributing to the observed declines in both domestic sales and exports. The ripple effects of external economic pressures, such as instability stemming from geopolitical conflicts, further complicate the situation for manufacturers and stakeholders within the industry.

In summary, the Federation of Thai Industries has reported a staggering 25.5 percent decrease in automobile production in Thailand for September 2023, largely due to reduced domestic sales as a result of tightened credit conditions and escalating non-performing loans. Furthermore, significant declines in both car sales and exports highlight the ongoing challenges facing the automobile industry in Thailand, amidst broader regional economic issues and geopolitical conflicts.

Original Source: vietnamnews.vn