Auto industry seeks stimulus from govt as sales plummet in 2024
Vehicle production in April fell 11.02 per cent year on year (YoY) to 104,667 units, and the auto industry is expecting measures from the government to boost demand, according to Surapong Paisitpatanapong, adviser to the president of the Automotive Industry Group.
The biggest decline in output for domestic sales was pickup trucks – down 45.94% YoY – while the manufacture of passenger cars fell by 5.03% YoY, said Surapong, who is also spokesperson for the Automotive Industry Group of the Federation of Thai Industries (FTI).
The decrease in production is due to the drop in sales caused by high household debt and slow economic growth, Surapong said. Meanwhile, the industrial production index has been in a downturn for several months, as purchasing power remains fragile, falling by 24.34% compared to March 2024.
He said the FTI may revise its 2024 car production target of 1.9 million units, as several agencies have downgraded the country's economic forecast. This suggests that domestic sales targets might need to be adjusted downward, he added.
However, the FTI will first assess the effectiveness of the government's economic stimulus plans and the impact of the delayed investment plans over the past six months before making any final decisions.
From January to April, a total of 518,790 vehicles were manufactured, representing a 17.05% decrease compared to the same period in 2023.
In April 2024, production for exports totalled 71,928 units, accounting for 68.72% of total production, an increase of 5.92% YoY. From January to April 2024, 345,608 units were manufactured for export, representing 66.62% of the total production, a decrease of 2.93% YoY, Surapong said.
Domestic car sales in April 2024 totalled 46,738 units, down 16.69% month on month and a 21.49% decline YoY.
This drop is attributed to stricter approval criteria for car hire-purchase loans by financial institutions and the country's slow economic growth, exacerbated by delays in the 2024 fiscal budget, leading to a significant reduction in government spending and investment, Surapong explained.
Consequently, consumer purchasing power weakened, causing vehicle sales to fall by 21.49% compared to the previous year, placing Thailand third behind Malaysia in car sales in the ASEAN region.
"The government has already initiated measures to boost the real estate market in April. It needs to urgently come up with measures to stimulate auto purchases, particularly internal combustion engine vehicles and pickup trucks, which use over 90% locally produced parts. This sector is interconnected with many other industries, similar to real estate,” Surapong said. “Increased production in these industries would lead to more employment opportunities, higher public employment, and increased revenue from excise, value-added, and income taxes for the government," he added.
