Thailand reduces car manufacturing target to 1.7 million units in 2024

Domestic car sales have been sluggish since 2023.

Due to months-long sluggish sales, the Federation of Thai Industries (FTI) has decided to cut its car manufacturing target for 2024 to 1.7 million units from the initial 1.9 million unit goal.

FTI announced the decision on July 25 amidst the report that total car production for this year's first half dipped by 17.3% year-on-year to 761,240 units.

Of the total, 245,047 units were produced for domestic sales and 516,183 for export.

Total car manufacturing dipped by 20.1% year-on-year to 116,289 units in June.

Given the situation, Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for the federation's Automotive Industry Club, stressed the necessity to adjust the 2024 manufacturing target by scaling down the projection of car production for the domestic market.

Earlier, the club set the domestic sales projection target at 750,000.

The target has been reduced to 550,000 units on July 25 given that the low car sales in the country continue to persist.

Thailand's high level of household debt and low level of household income amid slow economic growth were attributed to the dip in car sales.

Bankers have been more picky in granting loans for fear of non-performing loans.

Data from Thailand's Office of Industrial Economics disclosed that the country's Manufacturing Production Index plunged by 1.5% year-on-year in May, focusing on the sluggish manufacturing sector, particularly in the automotive industry.

Adding to that, domestic car sales have been sluggish since last year, with total car sales decreasing by 8.6% year-on-year in 2023.

Sales of internal combustion engine cars in the passenger car category dropped by 36.4% to 82,660 units. Pure pickups and pickup passenger vehicles also saw declines of 40.1% and 43.3%, reaching 89,581 units and 18,856 units respectively.

Meanwhile, domestic battery electric vehicle sales saw a slight increase of 6.9% year-on-year, totalling 33,508 units and accounting for 10.8% of total car sales in Thailand for the 6 months.

Car exports in the first half of the year dipped by 1.8% year-on-year, totalling 519,040 units, according to the club.