Significant Decline in Thailand’s Automobile Production in September

In September, Thailand’s automobile production decreased by 25.5% year-on-year, with domestic sales falling 37.1% to 117,000 units. The decline was attributed to stricter lending conditions and external economic challenges affecting exports, which fell by 10.8%.

In September, Thailand witnessed a significant decline in automobile production, with output decreasing by 25.5 percent compared to the same period last year, as reported by the Federation of Thai Industries (FTI). This downturn is primarily attributed to a sharp drop in domestic sales, a situation exacerbated by stricter credit policies implemented by financial institutions. During the second quarter of 2024, non-performing loans related to automobile financing amounted to 254 billion THB (approximately US$7.5 billion), marking a 29.7 percent increase year-on-year, according to earlier statements from the FTI. Surapong Paisitpattanapong, spokesperson for the automotive division of the federation, noted that car sales in Thailand fell by 37.1 percent, totaling just 117,000 units in September. Furthermore, automobile exports also saw a decline of 10.8 percent compared to the previous year, likely influenced by ongoing economic challenges faced by trade partners and the ramifications of the conflict in the Middle East. Thailand is recognized as Southeast Asia’s foremost automobile production hub and serves as a vital export base for renowned global manufacturers, including Toyota and Honda.

Thailand’s automobile industry plays a crucial role in the nation’s economy, being one of the largest contributors to both production and exports in Southeast Asia. The current economic landscape, characterized by tightening credit conditions and fluctuating demand, has posed significant challenges to automobile manufacturers and sales. The rise in non-performing loans indicates potential financial distress among consumers, which directly impacts sales figures. Additionally, geopolitical tensions and external economic factors have further complicated the outlook for the sector.

In conclusion, the dramatic 25.5 percent fall in automobile production in Thailand during September highlights the pressing issues facing the automotive industry, including a substantial decline in sales and a worrying surge in non-performing loans. The combination of tighter credit conditions and external economic challenges emphasizes the need for strategies to revitalize this critical sector and enhance its resilience against future disruptions.

Original Source: vietnamnews.vn