BANGKOK — Thailand’s car production dropped by 13.6% in February compared to the same month last year, continuing a 19-month decline. The Federation of Thai Industries (FTI) reported that production fell to 115,487 units, but the decrease was less severe than the 24.6% drop seen in January.
Thailand, Southeast Asia’s largest car production hub, manufactures vehicles for top global automakers, including Toyota and Honda. Despite the smaller decline in February, Surapong Paisitpattanapong, a spokesperson for FTI’s automotive division, cautioned that this did not signal a recovery. He pointed out that auto loan rejection rates remain high, and domestic sales are still weak.
“We need to wait until March for a clearer picture,” Surapong said, noting that February had more working days than January.
Domestic car sales also struggled, falling 6.7% in February to 49,313 units. This follows a 12.3% decline in January, driven by stricter auto loan approvals and high household debt, which particularly impacted pickup truck sales.
At the end of September 2024, Thailand’s household debt stood at 16.34 trillion baht ($481 billion), or 89% of GDP—one of the highest ratios in Asia. Surapong suggested that a government guarantee for pickup truck loans could help boost sales and support the overall economy. Domestic sales make up nearly half of Thailand’s car production, and about a third of those sales are pickup trucks.
Exports of Thai-made cars also dropped, falling 8.3% to 81,323 units in February. This follows a more significant 28.1% decline in January. Surapong attributed the drop to increased competition from Chinese car brands and stricter emission controls in certain countries.
The FTI is closely monitoring the U.S. policy on auto tariffs. Last month, U.S. President Donald Trump announced that tariffs on automobiles could be implemented as early as April 2.
Despite the challenges, the FTI forecasts a 2% increase in car production for the year, after a 20% decline in 2024, which marked the lowest output in four years.
