Thailand's car production is estimated to increase by 3.17% to 1.9 million units this year amid economic challenges, says the Federation of Thai Industries (FTI).
Last year, total car production reached 1.84 million units, lower than the target of 1.85 million, because of sluggish domestic sales and the impact of the global economic slowdown on car exports.
In 2024, car production for export is expected to stand at 1.15 million units while manufacturing for domestic sales should reach 750,000 units, said Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for the FTI's Automotive Industry Club.
"We expect the economy in 2024 will become healthier if the government's stimulus measures can boost purchasing power," he said.
The FTI said Thai manufacturers will face challenges to sell their cars abroad because countries such as Laos have imposed a higher rate of excise tax on cars, which could affect car exports.
Mr Surapong is also concerned about the impact of the global economic slowdown and geopolitical conflict, including the Russia-Ukraine war, the Israel-Hamas conflict and the tensions in the Red Sea, which affect global supply chains.
According to the FTI, Thailand's car production in December last year decreased by 15.7% year-on-year to 133,621 units, attributed to the impact of banks' stricter criteria granting car loans due to concerns over the high level of household debt in Thailand.
More imports of electric vehicles (EVs) from China had also affected car manufacturing in the country.
The government is promoting the EV industry by granting EV incentive packages, including subsidies, reduced import duties for fully assembled cars and an excise tax cut to car manufacturers.
In December, domestic car sales also decreased by 17.4% year-on-year to 68,326 units.
From January to December 2023, Thailand's car exports increased by 11.7% year-on-year to 1.11 million units, with internal combustion engine-powered cars making up 1.1 million units of the total.
The export value increased by 15.2% year-on-year to roughly 719 billion baht.