Thailand Reports 25.5% Decrease in Automobile Production in September

Thailand’s automobile production fell by 25.5% in September 2024 compared to the previous year, driven by a 37.1% drop in domestic car sales and a 10.8% decline in exports. This downturn results from tighter credit conditions and economic issues affecting trading partners, impacting non-performing loans which rose significantly.

In September, Thailand experienced a significant downturn in its automobile production, which plummeted by 25.5% compared to the same month in the previous year, according to the Federation of Thai Industries (FTI). This decline is primarily driven by a decrease in domestic sales, compounded by tightening credit conditions imposed by lenders. The FTI reported that non-performing loans related to automotive purchases surged to 254 billion THB (approximately US$7.5 billion) during the second quarter of 2024, marking a 29.7% increase year-over-year. Surapong Paisitpattanapong, a spokesperson for the automotive division of the FTI, highlighted that car sales in Thailand fell dramatically by 37.1%, with only 117,000 units sold in September. Moreover, exports of automobiles also saw a decline, decreasing by 10.8% year-on-year, owing to various economic challenges faced by trading partners as well as the ongoing conflict in the Middle East. Thailand, recognized as the largest automotive production hub in Southeast Asia, serves as a crucial export base for esteemed global car manufacturers, including Toyota and Honda.

Thailand holds a pivotal role in the automotive industry within Southeast Asia, being the largest production center and a key supplier for many leading global car manufacturers. Recently, the country has been grappling with economic challenges that have adversely affected its automobile sector. Credit restrictions from lenders have tightened, impacting domestic sales and resulting in a rise in non-performing loans, which presents a significant concern for the industry. Additionally, external economic factors and geopolitical issues, such as the conflict in the Middle East, have further exacerbated the situation, leading to a decrease in exports.

In summary, Thailand’s automobile industry faces a substantial challenge as production decreases sharply alongside falling sales and exports. The tightening of credit conditions and rising non-performing loans are critical factors contributing to this downturn. The economic outlook remains challenging for the country’s automotive sector, which is integral to its economy and position in the Southeast Asian market.

Original Source: vietnamnews.vn