Sales of premium cars in Thailand are likely to remain unchanged in 2025 as people's purchasing power is weak and they face difficulty in accessing auto loans, a situation which is expected to subdue the car market, says BMW Group Thailand.
Last year, the total number of newly registered luxury cars in the country decreased by 24% year-on-year to just over 30,000 units, according to the company.
The Munich-based automaker saw its total sales fall by 11.7% year-on-year to 13,659 vehicles though the sales of battery electric vehicles (BEVs) under the BMW and MINI brands, rose by 10.7% to 1,776 vehicles.
The company attributed the decrease to Thailand's slow economic growth and the high level of household debt that caused banks and car financing companies to tighten their criteria in granting auto loans, which led to a significant drop in domestic car sales.
Bankers have been gripped with fear with regard to non-performing loans (NPLs).
"We hope the financing companies will be less worried about NPLs in the automotive industry this year after the government launched the 'You Fight, We Help' debt relief scheme," said Rene Gerhard, president and chief executive of BMW Group Thailand.
The You Fight, We Help scheme, approved by the cabinet on Dec 12, 2024, is available to borrowers with debts overdue for a period of up to one year. It covers housing loans of up to 5 million baht, car loans of up to 800,000 baht and small business loans of up to 5 million baht.
"If the scheme becomes successful, it will help reduce household debt," said Mr Gerhard.
The rate of household debt to GDP stood at roughly 90% as of last year's third quarter, according to the Bank of Thailand.
With people facing difficulties in accessing auto loans, their demand for cars plunged. Domestic car sales in 2024 stood at 572,675 units, the lowest level in 14 years.
Mr Gerhard said BMW remains committed to investment in Thailand, especially its plan to build a battery factory in Rayong to serve the company's production of BEVs and plug-in hybrid EVs for domestic sales and export.
The firm will also start assembling the MINI Countryman at its plant in Rayong this year. This model was previously imported from Malaysia for sale in Thailand.