Thailand's car sales are unlikely to reach 1.2 million units this year as projected, as the prolonged political turmoil is expected to undermine economic prospects and weaken domestic consumption for the whole of this year.
Ong-arj Pongkijworasin the newly appointed chairman of the Federation of Thai Industries' automotive industry club said the club may revise down its local sales projection in the middle of the year after monthly sales in the first quarter did not exceed 100,000 units a month.
The club reported yesterday that Thailand's car production and domestic car sales continued to fall hard in March following the fading effect of the government's first-car subsidy scheme, which ended in 2012.
March's car production was down 29.2% from a year earlier to 181,334 vehicles. The decline accelerated from February's 24% pace, though production last month was higher than in February by 4.51%.
On top of the end of the government's incentives for first-time car buyers, the fall last month was also due to weakened purchasing power as the political turmoil and sluggish economic conditions continued to weigh heavily on consumer sentiment.
Consumer spending power has been eroded by high household debt. Delays in payments to farmers participating in the government's rice-pledging programme has also contributed to the drop in spending.
Domestic car and truck sales in March were down 46.7% to 83,983 units from a year earlier, but up 17.16% from February, a rise attributable mainly to the promotional power of the Bangkok International Motor Show, which started at the end of last month.
Motorcycle sales last month fell 18.34% to 156,029 units, but up 3.91% from February.
Nonetheless, the country's automotive exports hit a six-month high in March, with 113,313 vehicles shipped to overseas markets, up 8.77% from a year earlier and up 16.61% from February as car makers decided to increase production for export to stave off local tepid sales.
For the first three months of the year, overall car production totalled 517,492 units, down 28.28% from the same period last year, while local sales fell 45.8 % to 224,171 units.
Motorcycle sales also dropped for the period 21.35% to 431,795 units.