Thailand’s manufacturing production index (MPI) fell by 3.58% year-on-year to 93.41 points in November, attributed to the sluggish domestic car sales, says the Office of Industrial Economics (OIE).
From January to November the index decreased by 1.78% year-on-year.
Car sales in the country remained torpid as banks and car financing companies continued to tighten lending in the automotive market for fear of non-performing loans amid the high level of household debt, weak consumer purchasing power and slow economic growth, said OIE director general Passakorn Chairat.
In November, Thailand's car manufacturing decreased by 27.2% year-on-year, caused mainly by a drop in passenger car and pickup sales.
Industrial officials are discussing with car companies and the Ministry of Finance new measures to cope with the months-long stagnant car markets, said Mr Passakorn.
Excise tax reduction and an eco-car sales promotion scheme may be among solutions in addition to attempts to solve the debt problems.
Other industries that caused a drop in the November MPI include palm oil and electronics manufacturing.
Palm oil production decreased by 34.5% year-on-year because of drought and a decrease in palm oil demand.
Palm oil sales fell after the Energy Ministry decided to reduce the proportion of palm oil-derived methyl ester in diesel from 7% to 5%.
Methyl ester is mixed with diesel to make biodiesel.
In November, electronics manufacturing also decreased by 8.6% year-on-year, resulting from lower demand for integrated circuits and printed circuit boards, following a global economic slowdown.
Thailand’s capacity utilisation stood at 57.6% this months.
The OIE is monitoring other unpleasant economic factors that can affect the Thai economy, including the impact of geopolitical conflicts, sluggish economy in Thailand's trading partners, the influx of low-cost imports into the Thai market and the US new tariff policy under the Donald Trump administration next year.
The US-china trade war is feared to cause China to import more products into Asean.
