Domestic car sales may drop 5.3% this year, after a 21.4% slump last year, amid a recent outbreak of the coronavirus, the Federation of Thai Industries (FTI) said on Wednesday.
Sales are targeted at 750,000 cars in 2021 after 792,146 vehicles sold last year, the FTI said.
Thailand is a regional vehicle production and export base for the world's top carmakers.
Car production is expected at 1.5 million vehicles this year, half of which would be exported and the other half sold domestically. That compares to the 1.43 million produced last year.
"We are still worried about second or third coronavirus waves in some countries while Thailand has a second wave," Surapong Paisitpattanapong, spokesman of the FTI's automotive industry division, told a news briefing.
"There is also a chips shortage, making some carmakers stop production temporarily. Car exports may not grow this year," he said.
Car exports plunged 30.19% last year.
The FTI's Thai industries sentiment index fell in December for the first time in eight months due to concerns over the outbreak and the state of the Thai and global economies, it said.
However, domestic car sales rose for a second month in December, up 11.3% from a year earlier to 104,089 vehicles, after a 2.7% increase the previous month, it said.
"Sales in December were surprisingly good," Mr Surapong said, adding those were boosted by government stimulus, launches of new car models and marketing campaigns.
Thailand's coronavirus cases have tripled in the past five weeks to 12,653, with 71 deaths recorded since a year ago.
The government on Tuesday approved $7 billion in new stimulus to mitigate the outbreak impact on the economy.