Thailand’s Car Production Drops by 20% in 2024, Reaching a Four-Year Low

Thailand’s car production declined by 20% in 2024 compared to the previous year, hitting its lowest level in four years as domestic sales and exports struggled to gain momentum.

Key takeaways

• Thailand’s car production dropped 20% in 2024, reaching a four-year low due to weak domestic sales and exports.
• Domestic car sales fell 26.2%, driven by tighter auto loan rules amid high household debt, while exports declined 8.8%.
• Recovery in 2025 is expected through government EV incentives, economic stimulus measures, and tax reforms for future mobility technologies.

Thailand’s car production declined by 20% in 2024 compared to the previous year, hitting its lowest level in four years as domestic sales and exports struggled to gain momentum. Industry experts attribute this downturn to global economic uncertainties, rising production costs, and weakened consumer demand both locally and internationally. Manufacturers are now exploring strategies to revitalize the sector, including investments in electric vehicle (EV) production and government incentives aimed at boosting sales and exports. However, recovery is expected to be gradual, with analysts predicting a modest rebound in the coming years.

The Federation of Thai Industries (FTI) reported that the total car output dropped to 1.47 million units from 1.83 million in 2023, reflecting persistent challenges in the automotive sector.

The contraction continued into December, marking the 17th consecutive month of year-on-year decline. Monthly production fell 17.4% to 104,878 units, underscoring a prolonged slump that has impacted the industry’s growth.

Domestic car sales were a key driver of the downturn, plummeting 26.2% to 572,675 units, the lowest level in 15 years.

Surapong Paisitpattanapong, spokesperson for the FTI’s automotive industry club, attributed the sharp decline to tighter lending policies imposed by banks amid high household debt.

Looking ahead, the FTI projects a modest recovery in 2025, forecasting car production to rise to 1.5 million units. Of this, 1 million units are expected to be exported, with the remaining 500,000 targeted for the domestic market.

The recovery is anticipated to be driven by government incentives promoting the production of electric vehicles (EVs) and economic stimulus measures designed to bolster consumer spending.

In 2024, car exports dropped by 8.8% to 1 million units, reflecting challenges such as geopolitical tensions, increased competition from EV manufacturers, and stricter carbon emission regulations in key export markets. 

Despite these setbacks, Thailand remains Southeast Asia’s largest automotive manufacturing hub and a key export base for global carmakers, including Toyota and Honda.

The luxury car market also faced difficulties. A leading luxury car importer reported that domestic sales of high-end vehicles fell 25% to 30,000 units in 2024, down from 40,000 in 2023. Economic uncertainty and reduced purchasing power among affluent buyers contributed to the decline.

In response to these challenges, the Excise Department is preparing to restructure automotive tax rates to facilitate the transition from internal combustion engine (ICE) vehicles to newer mobility technologies, including electric and hydrogen-powered vehicles.

This strategic move aims to position Thailand as a competitive player in the global EV market while supporting sustainable growth in the automotive sector.