Encouraging signs are emerging in Thailand’s industrial sector, particularly in automotive manufacturing, which is showing a strong recovery after a prolonged contraction, according to Deputy Finance Minister Paopoom Rojanasakul.
The government is beginning to see positive momentum in the automotive industry, which had been in decline for two years, Mr Paopoom said on Saturday.
The country’s Manufacturing Production Index (MPI) in May increased by 1.9% year-on-year, marking the second consecutive month of growth following nine months of contraction, he said.
The automotive MPI rose by 12.7% — also for the second consecutive month — after turning positive for the first time in 21 months.
Automobile production in Thailand rose 10.3% in May from a year earlier, with the first annual rise in 22 months helped by higher pickup truck output for export markets, the Federation of Thai Industries (FTI) reported earlier.
However, for the first five months of 2025, output was still down 7.8% from a year earlier to 594,492 vehicles. Most industry leaders expect the full-year figure will also show a contraction.
Domestic car sales (including pickup trucks) rose for a second month in May, up 4.7% year-on-year, though demand is still constrained because of high household debt and tougher screening of loan applications.
Passenger car production in May surged by 22.1%, maintaining momentum after posting positive growth in April for the first time in a year. New passenger car registrations in May also grew by 8.7%.
The pickup truck MPI in May grew by 5.2%, its first increase in 23 months. However, the pickup market requires additional stimulus as it has been affected the most by lending constraints, said Mr Paopoom.
The Ministry of Finance has proposed a new programme that would offer tax reductions on new pickups to buyers who trade in their old ones.
Meanwhile, the MPI for motorcycle manufacturing continued its growth for the third consecutive month, rising by 7.4%, in line with a 5% increase in domestic motorcycle production.