The Federation of Thai Industries (FTI) is set to cut its forecast for domestic car sales after a poor first-quarter performance.
Surapong Paisitpatanapong, spokesman for the FTI's automotive industry club, said the country's sales would likely drop for a third straight year — by about 10% from last year's 881,832 vehicles — as the overall economy struggled to recover.
The FTI in January forecast a full-year increase in car production of 14.4% this year to 2.15 million vehicles.
Of that, 1.2 million will be exported, up by 6.4% from last year, and 950,000 sold locally, up by 7.7%.
The FTI yesterday reported first-quarter vehicle sales hit 197,787 year-on-year, down by 11.8%.
The new projection will be announced officially in July.
"Vehicle demand will remain tepid this year, as the overall economy has yet to grow as fast as expected due to relatively slow budget disbursement, sluggish private investment, low farm prices, higher household debt and banks' tightened approval for hire-purchase loans," Mr Surapong said.
"The domestic market's recovery is slower than expected, although it has returned to a normal situation after expiry of the government's first-time car buyer scheme."
Vehicle exports, meanwhile, are expected to outstrip an earlier forecast and surge by 10% this year from last year's 1.12 million cars.
Mr Surapong said exports to major buyers in Asia and Oceania bounced back in the first quarter, rising by 6.42% and 29%, respectively.
Purchases from Europe and North America rose by 71.8% and 126%, driven by massive demand for eco-cars.
Overall exports in the first quarter stood at 328,232 vehicles, a rise of 12.6% from the same period last year, with value increasing by 7.74% to 147 billion baht.
Mr Surapong said car output in the first three months stood at 524,540 vehicles, up by 1.36%.
The FTI expects overall car production to reach 2.03 million vehicles this year, down slightly from an earlier forecast of 2.15 million, due to falling domestic sales.
In related news, the FTI yesterday said exports hit a 27-year high of 127,619 vehicles last month, up by 12.6% year-on-year, with value rising by 8.08% to 57.1 billion baht.
Domestic sales fell by 11.7% year-on-year to 74,117 vehicles in March, while motorcycle sales rose by 17.9% to 183,976.
During the first quarter, 478,942 motorcycles were sold in Thailand, up by 10.91% year-on-year.
Car output increased slightly last month, by 1.72% year-on-year to 178,217 vehicles.
The Thai industries sentiment index (Tisi) in March declined for a third straight month and hit a five-month low of 87.7 points.
Tisi readings below 100 points indicate low confidence in the industrial sector.
FTI chairman Supant Mongkolsuthee said the economy and private-sector confidence remained weak in the first quarter.