Domestic car sales remained sluggish in July with a year-on-year drop of 20.5%, attributed to high levels of household debt and slow economic growth, says the Federation of Thai Industries (FTI).
Sales volumes fell to 46,394 units, in line with a 16.6% year-on-year decline in total car manufacturing to 124,829 units.
Banks continued to tighten lending criteria for prospective car buyers for fear of non-performing loans, which stood at 250 billion baht in July, a year-on-year increase of 29.7%, said Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for the FTI’s Automotive Industry Club.
Access to auto loans remained difficult, amid the country’s household debt-to- GDP ratio of 91%. This dealt a serious blow to car sales in the country.
“Sluggish sales of pure pickups were a key reason for the decline of overall domestic car sales,” said Mr Surapong.
In July, pure pickup sales plunged by 35.1% year-on-year to 13,167 units, according to the club.
Mr Surapong reiterated his call on authorities to come up with new measures to boost the economy and increase consumer spending power.
He also wants the government to keep injecting money into the economy through budget spending.
The budget spending allocation plan was approved by the House of Representatives in March to bolster the overall economy, following a months-long delay in budget planning for fiscal 2024, which began on Oct 1 last year.
The delay resulted from a lengthy process to form the Pheu Thai-led coalition government after the 2023 general election.
Months-long sluggish car sales in the country have already caused the club to reduce its car manufacturing target for 2024 to 1.7 million units, down from 1.9 million units.
Thailand’s car exports in July decreased by 22.7% year-on-year to 83,527 units because of geopolitical conflicts, especially in the Middle East. This affected shipping, causing a delay in delivering cars to countries in the region and Europe.
From January to July, car exports decreased by 5.39% year-on-year to 602,567 units.
“The geopolitical conflicts affected export markets in the Middle East and Europe while Africa, Asia, Central and South America encountered economic slowdown,” said Mr Surapong.
