In May, Thailand’s automotive industry experienced a sharp decline in vehicle production, which fell 17.94% year-on-year to 114,214 units. The slump was primarily due to decreased exports amidst political tensions in the Middle East and reduced demand in key markets. Consequently, the combined production for the first five months of the year fell by 1.13% to 587,759 units, as reported by the Federation of Thai Industries.
According to Surapong Paisitpattanapong, an advisor to the federation’s Automotive Industry Club chairperson, production for exports decreased by a staggering 36.20% in May. Completely built-up (CBU) vehicles saw a significant drop, down 26.69% year-on-year to 59,434 units in the same month.
The federation identified two major contributors to this downturn. The first was the political instability in the Middle East, which resulted in a 66.14% plunge in exports due to the conflict between the U.S. and Iran. The second was the Australian and Oceania market, where exports slipped 37.18% due to stricter carbon control regulations and increased competition from Chinese electric vehicles. Consequently, exports of CBUs fell 24.36% year-on-year to 41.72 billion baht (approximately US$1.28 billion) in May.
Contrary to the declining exports, domestic vehicle sales in Thailand increased by 10.6% year-on-year to 57,765 units in May. This was majorly driven by the increasing popularity of battery electric vehicles (BEVs). Electric passenger car sales surged by 61.19% to 18,034 units as consumers sought to mitigate higher fuel costs.
Over 150 billion baht was invested in the industry in the first five months of the year. Government economic stimulus measures also helped to increase confidence. However, growth in the pickup truck market, a significant segment of Thailand’s automotive industry, was minimal at 0.21%.
Despite mixed production figures, Thailand’s EV industry remained optimistic. New registrations for BEVs hit 21,619 units in May, marking an increase of 55.14%. The total registered BEVs in Thailand reached 468,757 units as of May 31. Meanwhile, motorcycle production also saw an uptick in May, growing 9.67% year-on-year to 230,691 units.
What led to the decline in vehicle production in Thailand?
The reduction was primarily due to a decrease in exports, fuelled by geopolitical tension in the Middle East and lower demand in major markets.
Which segment of the automotive industry in Thailand saw an increase despite the overall decline?
Domestic sales and the electric vehicle segment experienced growth, with the latter seeing new registrations rise to 21,619 units in May.
What is the outlook for the electric vehicle industry in Thailand?
Despite mixed production numbers, the electric vehicle industry in Thailand is showing positive signs of growth, with increasing new registrations and consumer interest.
