Household debt surges, interest rates rise, vehicles sales fall
Rising household debt and increasing interest rates have impacted consumer purchasing power, leading to a decline in car sales in the country in July 2023, the Federation of Thai Industries (FTI) reported. The export market has shown slight growth.
While the overall Thai automotive industry saw growth in production and exports during the first half of the year, domestic car sales fell, totalling 58,419 units, down 8.77% from the same month in 2022. From January to July of this year, car sales reached 464,550 units, a decrease of 5.45%.
According to Surapong Paisitpattanapong, the FTI's automotive industry vice president and spokesperson, the decline in car sales in July can be attributed to the tightening of financial institutions in approving loans for pickup trucks, resulting in increased household debt and rising interest rates that reduce purchasing power. This has led to a slowdown in the country's economy and this, coupled with a decrease in exports across various industries, has seen overtime decline, with the consequent effect on income and spending power.
A total of 149,709 cars were produced in July, an increase of 4.72%, bringing the number for the first 7 months of this year to 1,071,221, a 0.66% increase.
In terms of exports, 108,052 fully assembled cars were exported in July, marking a 30.05% increase. The growth is due to increased imports of cars from trading partners as their economies expand. Export markets have expanded in almost every region except for North America, which experienced a decrease. The value of exports reached 67.59 billion baht, a 30.01% increase. From January to July 2023, car exports totalled 636,868 units, a 19.55% increase, with a total export value of 396.77 billion baht, a 24.52% increase, FTI's figures showed.
The picture is much rosier for electric vehicles, with 6,904 new registrations of Battery Electric Vehicles (BEVs) in July, representing a staggering 373.20% increase. From January to July 2023, a total of 49,949 BEVs were registered, marking a 469.61% increase, according to FTI's records.
