A decline in domestic car sales has prompted the Federation of Thai Industries (FTI) to revise down Thailand's car manufacturing target to 1.85 million cars this year from 1.9 million.
The FTI’s Automotive Industry Club earlier cut its forecast for car production to 1.9 million from 1.95 million as car sales remained sluggish.
Car production for the domestic market is expected to decline to 800,000 units this year, down from the previous projection of 850,000 units, while the outlook for export manufacturing remains unchanged at 1.05 million units, said Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for the auto club.
He attributed the decrease to banks’ stricter criteria in granting car loans.
“Financial institutions are applying tougher lending criteria to screen out borrowers because of concerns over non-performing loans amid high household debt, higher interest rates and weak purchasing power,” said Mr Surapong.
Thai household debt exceeds 90% of the nation’s GDP, while public debt is at 61% of GDP this year.
From January to September, total car production in Thailand slightly increased by 1.6% year-on-year to 1.38 million units.
In September, total vehicle manufacturing decreased by 8.4% year-on-year to 164,093 units, with production for the domestic market decreasing by 17.8% year-on-year to 59,997 units.
“The decrease resulted mainly from slowing vehicle sales, especially for pickups, with pure pickup production diving by 47.1%, while manufacturing of pickup passenger vehicles [four doors] plunged by 50.2%,” he said.
Domestically, sales of pure pickups plummeted by 44.9% year-on-year to 19,114 units and sales of pickup passenger vehicles decreased by 36.3% to 4,229 units in September, according to the club.
Car manufacturing for export in the same month fell by 1.9% year-on-year to 104,096 units.
For the first nine months of this year, car production for export rose by 8.5% year-on-year to 809,964 units.
Car exports in September fell by 2.9% year-on-year to 97,476 units, but from January to September, car exports grew by 16.3% year-on-year to 821,899 units.
The main export markets are the Middle East, Europe, North America, Central and South America, according to the club.
“The FTI is monitoring the impact of the Israel-Hamas conflict on car exports,” said Mr Surapong.