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Car production drops sharply

Car production drops sharply

Car production in Thailand fell by 20.11% in June compared to the previous year due to tighter financing rules and high consumer debt, the Federation of Thai Industries (FTI) reported on Thursday. This follows a 16.19% year-on-year drop in May.

In the January-June period, car production contracted by 17.39% from a year earlier, totaling 761,240 units, according to the federation.

“Stricter measures for credit approval from financial institutions, coupled with household debt nearing 90% of gross domestic product (GDP), led to a higher rejection rate for auto loans,” said Surapong Paisitpattanapong, spokesman of the FTI’s automotive industry division, during a news briefing.

Domestic car sales dropped 26.04% in June from a year earlier, following a 23.38% annual decline in May.

The federation has lowered its domestic sales target to 550,000 vehicles from an earlier forecast of 750,000 units. It also revised its production target to 1.7 million units for the year, down from the previously projected 1.9 million vehicles. In 2023, Thailand produced 1.84 million vehicles.

Auto exports are still expected to reach 1.15 million vehicles this year.

Thailand remains Southeast Asia’s biggest auto production center and an export base for some of the world’s top carmakers, including Toyota and Honda, with pickup trucks among the key vehicles manufactured.

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