Car production is expected to plunge 37% to 1.33 million units this year, possibly sinking as much as 50% to 1 million if the coronavirus crisis drags into June, says the Federation of Thai Industries (FTI).
Surapong Paisitpatanapong, a spokesman for the FTI's automotive club, said the global spread of the virus has hit the automotive industry and related industries hard.
Of the 1.33-million-vehicle output this year, the FTI expects Thailand to produce 665,000 units for export and 665,000 for the domestic market.
In January, the club estimated that 2 million vehicles would be produced this year, already a conservative outlook at the time. Then in March, the club downgraded production estimates to 1.9 million units.
"The FTI is waiting to see the full effects of the Covid-19 outbreak on the automotive industry," Mr Surapong said. "It's difficult to say at the moment."
Domestic car sales shrank for a 10th straight month in March, dropping 41.7% from a year earlier to 60,105 units.
Sales in February fell 17.1% from the previous year.
Thailand is a regional vehicle production and export hub for the world's top car makers.
For the first quarter of 2020 (January-March), the club said Thailand's car production was 453,682 units, a 19.2% year-on-year decrease. In March, 146,812 cars were produced, down 26.2% compared with the same period in 2019.
The club said car exports in the first quarter of 2020 stood at 253,904 units, a 16.4% year-on-year decline. In March, car exports stood at 85,376 units, a drop of 17.8% year-on-year.
In a normal April there are many holidays, and car makers typically shut down plants until April 30.
Global car makers such as Toyota, Honda, Mitsubishi, Ford and Mazda have shut down production lines from March to April because of falling car sales and the government policy to let employees work from home.
The club said the automotive and auto parts industries employ about 750,000 people in Thailand.
The two industries have no plans to lay off workers, but car makers have cut hours for many employees.
Suparat Sirisuwanangkura, senior executive adviser at Toyota Motor Thailand Co, said the company has no plans for layoffs and the company has supported its employees during the outbreak.
"We have treated and supported our employees the same as any other company because we understand that it's is a difficult time in the Covid-19 outbreak, and our staff need the help too," Mr Suparat said. "We hope the Covid-19 outbreak will end soon."
Toyota expects its production plant to operate as normal during May and June, he said.
All car makers have discussed marketing stimulus measures to boost purchasing power.