# Thailand’s car production fell 13.62% in February, marking 19 straight months of decline - Link: https://www.thailand-business-news.com/business/205025-thailands-car-production-fell-13-62-in-february-marking-19-straight-months-of-decline - Published: 2025-03-26T09:30:00+07:00 - Author: Supaporn Naksuwan Thailand has announced a 13.62% decrease in car production in February compared to the same month last year, marking the 19th month in a row of decline. ## Key Points * Car production in Thailand dropped by 13.62% in February from a year earlier, marking the 19th consecutive month of decline, according to the Federation of Thai Industries. * Domestic car sales and exports also fell in February, influenced by factors such as tightened auto loans, high household debt, increased competition from Chinese car brands, and emission controls in some countries. * Despite the ongoing decline, the Federation of Thai Industries forecasts a 2% rise in car production this year, following a 20% decrease in 2024 that resulted in the lowest output in four years. Thailand reports a 13.62% drop in car production in Thailand in February compared to the previous year, marking the 19th consecutive month of decline. This decrease, however, was less severe than January’s 24.63% year-on-year slump. The Federation of Thai Industries attributed this to a prolonged decline in domestic sales and exports, with domestic car sales dropping by 6.68% and exports falling by 8.34%. ADVERTISEMENT The high household debt in Thailand, equivalent to 89.0% of the GDP, has led to tightened auto loans, particularly for pickup trucks. The federation is closely monitoring the U.S. policy on auto tariffs, as announced by U.S. President Donald Trump. Despite the decline, the federation forecasts a 2% rise in car production this year. Meanwhile, domestic demand for vehicles remains subdued due to the financial strain on households, prompting manufacturers to focus on export markets. The federation also highlights concerns over fluctuating raw material costs, which could impact production efficiency. To counter these challenges, automakers are exploring strategies to enhance cost management and invest in electric vehicle (EV) production to align with global trends. ————-_The following content was created with the assistance of a machine learning algorithm_ —————- ### Related**Posts** ### 󠀁[Asian stocks retreat as oil rises above $100 and investors reassess global rate risks](https://www.thailand-business-news.com/markets/333019-asian-stocks-retreat-as-oil-rises-above-100-and-investors-reassess-global-rate-risks)󠁿 ### 󠀁[Thailand’s Floods Expose Severe Vulnerabilities in Its Automotive Supply Chain](https://www.thailand-business-news.com/business/332669-floods-in-thailand-highlight-the-vulnerability-of-the-countrys-automotive-supply-chain)󠁿 ### 󠀁[Thailand Business News — Morning Briefing](https://www.thailand-business-news.com/business/332413-thailand-business-news-morning-briefing-2)󠁿 ### 󠀁[Thailand is making AI and semiconductors the focus of its next five-year development plan](https://www.thailand-business-news.com/business/332032-thailand-is-making-ai-and-semiconductors-the-focus-of-its-next-five-year-development-plan)󠁿 ## Thailand Automobile Market Overview Thailand is a cornerstone of Southeast Asia’s automotive industry, often dubbed the “Detroit of Asia” due to its status as the region’s largest automobile production hub. However, as of 2024 and early 2025, the market has faced significant challenges alongside pockets of growth, particularly in the electric vehicle (EV) segment. Below is an overview based on the latest trends and data up to March 25, 2025. ### Market Size and Sales Performance * **Total Vehicle Sales in 2024**: Thailand recorded 572,675 new vehicle sales, a 26.2% decline from 2023 (775,780 units), marking the lowest annual figure in 15 years since 2009 (Nikkei Asia). This downturn reflects a broader economic slowdown and weakened consumer demand. * **EV Sales**: Despite the overall decline, EV sales showed resilience. Registrations for battery electric vehicles (BEVs) grew 11.67% year-to-date through September 2024, though monthly figures softened, with a 25.81% drop in September alone ( Thailand Business News). The Federation of Thai Industries (FTI) revised its 2024 EV sales estimate to 76,000 units, matching 2023 levels, down from an earlier 100,000-unit projection (Nation Thailand). * **Market Penetration**: EVs accounted for 15.4% of total vehicle sales in 2024( Bangkok Post), up from previous years, driven by government incentives and growing consumer interest. ## Declining Production Trends * **Production Volume**: In 2023, Thailand produced 1.83 million vehicles (Statista), but 2024 saw a sharp decline. By January 2025, production dropped 24.63% year- on-year to 107,103 units, marking the 18th consecutive month of decline (IndexBox). February 2025 continued this trend with a 13.62% drop. * **Factors**: Weak domestic sales, reduced exports (down 17.67% in September 2024 to 80,254 units), and competition from imported Chinese EVs have strained production( Thailand Business News). High household debt and tighter auto loan conditions further exacerbated the slump. ## Key Players and Market Share * **Traditional Leaders**: Japanese brands like Toyota (34.6% market share target for 2024), Isuzu, and Honda have historically dominated, but faced sales declines in 2024—Toyota down 17.4%, Isuzu down 48.3%, and Honda down 4.7% from January to April (Nation Thailand). * **EV Market**: Chinese automakers, particularly BYD, have surged ahead. BYD held a 32% EV market share in 2024 (estimated 28,238 units), while Tesla captured around 10% (approximately 9,000 units). Other Chinese brands like MG and NETA also gained traction, collectively holding 89% of EV sales from January to April 2024 (Auto Innovator). * **Notable Growth**: BYD’s sales rose 50.2% in the first four months of 2024, reflecting its strong foothold (Nation Thailand). ## Government Policies and Incentives * **Subsidies**: The government reduced EV subsidies from 150,000 Baht per vehicle in 2023 to 100,000 Baht in 2024, yet continues to promote EV adoption with a target of 30% of vehicles produced being EVs by 2030 (Mobility Foresights). * **Loan Guarantees**: In March 2025, the government introduced loan guarantees for pickup trucks, a critical segment, to stimulate the flagging auto sector ( Thai PBS World). * **Infrastructure**: The Eastern Economic Corridor (EEC) hosts new EV manufacturing plants, such as BYD’s Rayong facility (opened July 2024, capacity 150,000 units/ year), supporting local production (CNEV Post). ## Economic and Consumer Context * **Economic Challenges**: Thailand’s GDP growth was modest at 2.7-2.8% in 2024( Thailand Business News), with high household debt (non-performing auto loans at 259.33 billion Baht by Q2 2024) and stricter lending criteria curbing purchases( Nation Thailand). * **Consumer Preferences**: Pickup trucks remain dominant (e.g., Toyota Hilux, Isuzu D-Max), but EV adoption is rising, especially among urban consumers, driven by environmental awareness and lower operating costs. ## Competitive Dynamics * **Chinese Influence**: Chinese brands are reshaping the market with affordable EVs, challenging Japanese incumbents. BYD’s local production and pricing (e.g., Atto 3 at 1.099 million Baht vs. Tesla’s 1.7 million Baht starting price) give it an edge (The Thaiger). * **Exports**: Thailand remains an export hub, shipping to 124 countries, though geopolitical tensions (e.g., Middle East conflicts) disrupted routes in 2024, reducing export volumes (Thailand Business News). ## Outlook for 2025 * **Projections**: The FTI forecasts 2024 production at 1.9 million units (a 3.17% increase from 2023), with domestic sales at 750,000 units (Nation Thailand). However, ongoing declines in early 2025 suggest a potential downward revision in November 2025 discussions (Thailand Business News). * **Growth Segments**: EVs are expected to drive recovery, with VinFast (30% ASEAN EV share) and BYD expanding aggressively (Focus2Move). Hybrid sales may also rise as electrification slows slightly (MarketsandMarkets). * **Challenges**: High debt, competition, and supply chain issues (e.g., semiconductor shortages easing but persistent) will continue to pressure the market (Krungsri).