Car Sales, Manufacturing, and Production Hit Hard in July

Impacts of Rising Debt on Car Sales

Car sales in July plunged by 20.5%, totaling only 46,394 units. This downturn coincides with a troubling 16.6% year-on-year reduction in overall car manufacturing, which has dwindled to 124,829 units. The tightening of lending criteria by banks has contributed to this situation, driven by fears of increased non-performing loans, which reached 250 billion baht in July, marking a 29.7% increase from the previous year.

Manufacturing Challenges

The household debt-to-GDP ratio stands alarmingly at 91%, further complicating access to auto loans and significantly affecting sales. In specific markets, the slump in pure pickup sales, which fell by 35.1% year-on-year to 13,167 units, has been particularly critical.

Government Intervention Needed

Surapong Paisitpatanapong, vice-chairman of the FTI, urges authorities to implement effective measures to boost the economy and elevate consumer purchasing power. The recent allocation plan for the budget aims at accelerating economic activities after delays stemming from governmental transitions.

Adjustments in Production Targets

Due to prolonged sluggish sales, the automotive sector has revised its production goal for 2024 down to 1.7 million units from 1.9 million units. Furthermore, car exports have seen a 22.7% year-on-year decrease in July, largely influenced by geopolitical tensions impacting shipping and the overarching economic slowdown.

With exports from January to July falling 5.39% year-on-year to 602,567 units, the outlook remains grim amidst concerns from conflicts affecting key markets.