The total car manufacturing target for 2024 has been reduced to 1.5 million vehicles down from 1.7 million, which is the lowest target seen since 2021, as car sales in the domestic market remain torpid, following banks' stricter criteria in the granting of auto loans, says the Federation of Thai Industries (FTI).
A drop in car exports from January to October also caused the FTI to downgrade the target.
"We have decided to cut the car manufacturing target for domestic sales to 450,000 units, down from 550,000 units, as well as decrease the production target for exports to 1.05 million units from 1.15 million units," said Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for the FTI's Automotive Industry Club.
This is the second time this year the club has adjusted the car production target.
In July, the club revised its car production target down to 1.7 million vehicles from 1.9 million.
According to the club, total car production in October fell by 25.1% year-on-year to 118,842 units.
While manufacturing for the export market decreased by 7% year-on-year in October, production for domestic sales plummeted by up to 51.7% year-on-year.
From January to October, total car manufacturing decreased by 19.2% year-on-year to 1.24 million vehicles, said Mr Surapong.
Car sales in the domestic market remained sluggish in October.
The sales volume decreased by 36% year-on-year to 37,691 units, the lowest level in 54 months after Thailand ended pandemic-era lockdown measures in May 2021.
"The main reason is banks and car financing companies continued to tighten lending criteria for fear of non-performing loans, caused by high household debt," he said.
Car exports were also not good, with a year-on-year decrease of 20.2% to 84,334 units in October.
From January to October, car exports decreased by 8% year-on-year to 853,221 units.
"One reason is the impact of geopolitical conflicts, including the Russia-Ukraine war and tensions in the Middle East. These problems affected international logistics," said Mr Surapong.