Car sales growth is likely to slow in the second half as the local market sees fewer model launches to attract buyers and the political picture remains opaque to car makers, says the automotive industry club of the Federation of Thai Industries (FTI).
Surapong Paisitpatanapong, the club's spokesman, said May car sales grew at a slower pace than the healthy year-on-year growth of 8-10% from a few months earlier.
The club reported yesterday that car sales last month totalled 88,097 units, up 3.7% year-on-year. Sport utility vehicles saw a sharp drop of 18.1% to 6,125 sold. Sales of other segments, led by passenger cars and pickups, increased in May.
"Overall, the Thai economy has still performed very well in terms of new investment plans from the public and private sectors and the growth of foreign tourists in Thailand, but new movements in Thai politics are too unsteady to resume positive sentiment about the country," Mr Surapong said. "The club witnessed fewer new car launches during January to May, while 2018 had many new and refreshed models to stimulate the local market."
The club said car sales in the first five months of 2019 totalled 437,722 vehicles, up 9.1% year-on-year.
Mr Surapong said the club must monitor the local market in the next few months before predicting overall sales for the full year.
"We have yet to revise down our car sales projection in 2019, expecting 1.05 million cars to be sold, up 0.8%," he said. "The club has an expectation that the new government after the general election will take all responsibility and start to disburse the state budget as planned."
The Thai economy, including the automotive industry, is suffering from the effects of the US-China trade war, Mr Surapong said.
The club reported that car exports in May fell by 3.6% year-on-year to 95,331 units on a contraction in shipments to three regions: Oceania, Central/South America and Africa.
Car export value last month stood at 48.65 billion baht, down 6.2% year-on-year.
Shipments from January to May totalled 462,286 cars, down 0.9% year-on-year. Export value for the period totalled 233.85 billion baht, down 3.3%.
Mr Surapong said auto exports have gradually shrunk in the last few years, driven by turmoil in the Middle East, formerly a key destination of Thai-made cars. Meanwhile, the US-China trade war emerged as a risk factor in early 2018.
"Car and auto parts exporters are now concerned about overall auto exports in the near future, not only from the impact of the trade war, but also the coming of new-generation cars like electric vehicles while Thailand still exports fuel-based conventional vehicles," he said.
The club expects car exports for the full year to reach 1.1 million units, down 3.6%.
Automotive output fell by 6.1% to 181,338 units in May as local sales and export orders ebbed, Mr Surapong said. Production in the first five months stood at 893,067 units, up 2.9%.