A government plan to launch a car trade-in programme is meant to revive domestic car sales, but car manufacturers and industry observers say it might not be enough, requesting more new measures to end the long slump.
They are hopeful for improved car sales during the 12-day Thailand International Motor Expo, which starts on Friday.
Industry Minister Akanat Promphan acknowledged automakers’ concerns over the nosedive in domestic sales as he presided at the 41st annual car event, being held at Impact Challenger in Nonthaburi.
“We expect the car trade-in programme to generate fresh demand in the automotive market,” said Mr Akanat of his ministry's trade-in proposal. “We are working on the details and expect to conclude it soon.”
The Federation of Thai Industries (FTI) earlier revised down its domestic car manufacturing target for 2024 to 1.5 million units from 1.7 million, which is the lowest since 2021, as car sales in the domestic market remain weak.
In the first 10 months of this year, total car sales (conventional and EV) declined by 26.2% year-on-year to 476,350 units. Pickup sales were down 43%.
The plunge has been attributed to banks’ stricter criteria for granting auto loans for fear of bad debt as the country is struggling to deal with the high level of household debt.
A drop in car exports from January to October also caused the FTI to downgrade its target.
From January to October, total car manufacturing decreased by 19.2% to 1.24 million vehicles, according to the FTI.
The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) earlier proposed setting up a 5-billion-baht fund to provide loans for pickup buyers.
“The JSCCIB is planning to ask the prime minister to consider this measure which is aimed to help people who buy pickups, which are usually used in their businesses,” said Suphot Sukphisarn, chairman of the FTI’s Auto Parts Industry Club.
“If the measure is approved, we believe it will increase the purchasing power of this group of people.”
An increase in pickup sales will also help maintain the employment of 800,000 workers in car and auto parts businesses, said Mr Suphot. More than 80% of the auto parts produced in Thailand are for pickup assembly.
Ratthakarn Jutasen, managing director of Ford Thailand, agrees that a mix of measures is needed to lift the domestic car market.
A trade-in campaign could stimulate demand, but he wants to know more details, including car types, as well as whether it can ensure the sustainable growth in demand.
“We also want to see other measures including a tax cut to increase buyers’ purchasing power,” said Mr Ratthakarn.
Wallop Treererkngam, executive vice-president of Suzuki Motor (Thailand), also urged the government to come up with new stimulus measures to help manufacturers across various industries.