Volvo Car Thailand expects car sales not to exceed 5% growth this year as it plans to survive a challenging period by enticing more consumers with new electric vehicle (EV) models and a battery repair service, aimed at helping drivers save on long-term maintenance spending.
"This will be another difficult year for the Thai automotive industry, which is weighed down by weak auto loans, high household debt levels and the sluggish economy," said Chris Wailes, managing director of Volvo Car Thailand and Malaysia.
Banks and car financing companies tightened their lending criteria to avoid non-performing loans as the rate of household debt to GDP stood at roughly 90% as of last year's third quarter.
Domestic car sales should tally 550,000-560,000 units this year, a decrease from 572,675 units in 2024, according to the company's estimates.
Growth in the Thai premium car segment is expected to remain flat, comprising 40% of total car sales in the country, said Mr Wailes.
The company is monitoring the impact of the new US trade policy under the Donald Trump administration and assessing whether it will affect global car sales.
"Trump's trade policy can reshape the global economy, but we believe our parent company can deal with the situation," he said.
"We believe the policy will not directly affect Volvo Car Thailand."
Washington already imposed an additional 10% tariff on Chinese products on Feb 4, drawing countermeasures from Beijing, which include a 15% tariff on imports of US coal and LNG products.
Whether the Thai automotive market will face an indirect impact from the US tariff policy requires monitoring, said Mr Wailes.
A renewed trade war between the US and China raises concerns that China will increase its EV exports to Southeast Asia, he said.
Volvo wants to increase sales of battery EVs and plug-in hybrid EVs (PHEVs) in the Thai market this year. Sales of the company's fully electric models accounted for 80% of total sales in 2024, rising 24% year-on-year.
Mr Wailes said he believes PHEVs have the potential to become more popular in Thailand, in part because of their affordable prices.
Volvo also aims to enhance its after-sales services to increase customer value.
"We plan to open a battery repair centre in the middle of this year, along with smart repair services that offer fast and cost-effective repairs for small to medium-sized bodywork damage using modern techniques," he said.