Thai car market suffering sales slump
Decline attributed to several issues, including significant slowdown in overall economy
High rate of loan rejections and dropping prices of second-hand vehicles has particularly impacted the sale of pickup trucks
Thai auto sales plunge amid strict loan policies, slow economic recovery
Thailand’s auto market has been sluggish this year, with October sales hitting just 37,691 units – the lowest monthly figure in over four years.
This decline has been attributed to several factors, including a slow economic recovery and increasingly stringent credit policies from financial institutions dampening consumer purchasing power.
Thawatchai Jungsanguanpornsuk, managing director of Phranakorn Automotive Co Ltd, said that loan rejection rates have surged to 70%, particularly impacting pickup trucks, like single-cab and extended-cab models. Strict credit policies have also been exacerbated by falling second-hand car prices leading to a noticeable downturn in the auto market.
He added that though projections show that the auto market will be about the same next year, a recovery can be expected in 2026.
Thi Phermphongphan, senior executive vice president of Mazda Sales (Thailand) Co, Ltd, said the pickup truck segment has experienced a 40% decline, significantly worse than the broader market. Given the size of this segment, its slump has had far-reaching effects on the economy.
Government stimulus needed
Noriaki Yamashita, Toyota Motor Thailand’s managing director, described this year’s projected sale of 600,000 units as “abnormal” for the Thai market, suggesting an annual range of 800,000 to 1.1 million would be more appropriate.
Toyota has urged the government to implement economic measures to boost consumer purchasing power and promote the automotive industry, including support for developing new energy solutions.
Yamashita, meanwhile, said he was confident in Toyota’s ability to compete with the influx of Chinese carmakers, but clarified that Toyota will not engage in the ongoing price war. Instead, he said, the company will focus on after-sales service to maintain long-term customer satisfaction.
Ford seeks tax incentives
Ratthakarn Jutasen, managing director of Ford Thailand, remains positive about the Thai auto market’s future, calling for government tax incentives that are similar to those granted in the real estate sector.
He also said he supports measures to extend credit to individuals and SMEs, which could provide much-needed economic relief.
