Domestic sales of pickups remained sluggish in January, plummeting more than 43% year-on-year, as banks remain cautious in granting auto loans, says the Federation of Thai Industries (FTI).
Banks' stricter lending criteria for prospective vehicle buyers, which resulted in a large drop in pickup sales, remain in place as household debt levels are elevated.
As of 2023, household debt was estimated at more than 90% of GDP.
"In January, the sales of pure pickups plunged by 43.5% year-on-year to 14,864 units," said Surapong Paisitpatanapong, the FTI's vice-chairman and spokesman for its Automotive Industry Club.
The loan rejection rate in the pickup segment is high, especially compared with the rate in the passenger car segment, he said.
This indicates financial institutions are wary of expanding car seizures, said Mr Surapong.
Last year, between 200,000 to 300,000 cars were seized. He said the typical average is 180,000 seizures per year.
The decline in pickup sales was the main reason overall vehicle sales sagged in the domestic market last month, said Mr Surapong.
Electric vehicle sales continued to increase as their prices become more affordable.
Buyers are also interested in sport utility vehicles, he said.
According to the club, vehicle exports slightly decreased by 0.08% year-on-year to 86,716 units, attributed to a shortage of roll-on/roll-off ships, or cargo ships assembled to carry wheeled cargo.
The shortage resulted from many factors, including the impact of tensions in the Red Sea.
"Asia, Africa and North America were all affected by the ship shortage, eventually hampering goods exports," said Mr Surapong.
The club maintains its car manufacturing target at 1.9 million units this year, a year-on-year increase of 3.1% from last year.
Car production for export is expected to total 1.15 million units, while production for domestic sales is projected at 750,000 units.
In January, Thailand's car manufacturing decreased by 12.4% year-on-year to 142,102 units because of a drop in domestic car sales.
"We expect the economy to keep recovering this year if more state stimulus measures are launched to prop up people's purchasing power," he said.