Ford Thailand, the production and distribution arm of US-based Ford Motor, plans to continue expanding its investment in Thailand despite the slowdown in the domestic car market.
The sluggish car sales are attributed to many economic factors, but banks and car financing companies' stricter criteria for auto loans based on elevated household debt is causing much hang-wringing among manufacturers.
Ford, whose pickups are popular with consumers, acknowledges this unfavourable trend, said Ratthakarn Jutasen, managing director of Ford Thailand.
Yet the company remains focused on long-term investment and believes Thailand still has high potential growth in the automotive industry, he said.
"We expect the stagnant automotive industry to eventually recover," said Mr Ratthakarn.
"We also want improved car exports as the overseas sales outlook brightens."
A significant drop in domestic car sales, resulting mainly from lower auto loans, caused the Federation of Thai Industries (FTI) to reduce Thailand's total car manufacturing target to 1.5 million vehicles for 2024, down from 1.7 million.
A decline in car exports from January to October also caused the FTI to downgrade the shipping target.
Ford recently met Prime Minister Paetongtarn Shinawatra to discuss the car market and its investment plan in Thailand.
Mr Ratthakarn declined to elaborate on the investment direction, saying only the company plans to unveil the details soon.
He said Ford asked the government to talk with banks about possibly relaxing lending criteria to lift car sales, especially in the pickup segment.
"Pickup sales in the country plunged to the lowest level in 23 years," said Mr Ratthakarn.
According to the FTI, pickup sales in October decreased by 41.6% year-on-year to 10,896 units. From January to October, their sales plummeted by 39.5% year-on-year to 137,456 units.
Lower pickup sales also affect auto parts businesses because pickup assembly utilises 80-90% of the total auto parts in the market.
The Joint Standing Committee on Commerce, Industry and Banking earlier called on the government to find ways to help pickup owners whose vehicles are seized after they fail to meet debt repayment criteria.
This group of motorists often depend on pickups to operate their businesses.
If this group is given 3-6 months to deal with their liquidity problems before their pickups are seized, it could greatly help these small businesses, said Sanan Angubolkul, chairman of the Thai Chamber of Commerce.
"If they can use their pickups to earn a living, they have more money to pay to car financing or leasing firms," he said.