Months-long sluggish car sales have caused the Federation of Thai Industries (FTI) to reduce its car manufacturing target for 2024 to 1.7 million units, down from 1.9 million units.
The decision was announced on Thursday as the FTI reported total car production during the first half of this year dropped by 17.3% year-on-year to 761,240 units, with 245,047 units produced for domestic sales and 516,183 units manufactured for export.
In June alone, total car manufacturing plunged by 20.1% year-on-year to 116,289 units.
"With this situation, we need to adjust our 2024 manufacturing target by revising down the projection of car production for the domestic market," said Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for the federation's Automotive Industry Club.
The club earlier set the production target for domestic sales at 750,000 units.
Yesterday it reduced the target to 550,000 units as low car sales in the country are tending to persist.
Mr Surapong attributed the decrease in car sales to the high level of household debt and low level of household income amid slow economic growth.
The household debt-to-GDP ratio is currently 91%, causing banks to tighten lending criteria for borrowers who apply for auto loans.
Bankers have been more selective in granting loans for fear of non-performing loans.
The Manufacturing Production Index dipped by 1.5% year-on-year in May, underscoring the sluggish manufacturing sector, especially in the automotive industry, according to the Office of Industrial Economics.
Car manufacturers have encountered sluggish domestic car sales since last year, with total car sales decreasing by 8.6% year-on-year in 2023.
From January to June this year, total car sales in the country declined by 24.1% year-on-year to 308,027 units.
Sales of internal combustion engine-powered cars in the passenger car category plummeted by 36.4% to 82,660 units. Pure pickups and pickup passenger vehicles plunged by 40.1% year-on-year and 43.3% year-on-year to 89,581 units and 18,856 units, respectively.
Domestic battery electric vehicle sales managed to increase by 6.9% year-on-year to 33,508 units, making up 10.8% of total car sales in Thailand during the six-month period.
Car exports in the first half of the year decreased slightly by 1.8% year-on-year to 519,040 units, according to the club.
