Thailand’s car production at 30 year low; industrial confidence also lowest in 11 year

The Federation of Thai Industries (FTI) said on Tuesday that domestic car sales dropped by 65 per cent
in April as the coronavirus outbreak and the subsequent nationwide lockdown sapped away demand.

FTI said that only 24,711 automobiles were produced in April, down 83.55 per cent year on year.

The number of vehicles produced for export had dropped 81.76 per cent, while the number
produced for domestic consumption was down 85.35 per cent.

The automotive industry may not reach the 1-million-unit threshold this year, which would be a 50%
decrease from 2019.

Global car makers Toyota, Honda, Mitsubishi, Ford and Mazda shut down production lines from March
to April because of falling car sales and the government policy to let employees work from home.

The total amount of cars produced only reached 478,393 units in the first four months, representing a
drop of 32.8 per cent when compared to the same period in 2019.

Production dropped by 83.6 per cent as carmakers chose to temporarily close factories at the end of
March. Many are expected to resume operation in late May.

The total export volume in the past four months (January-April) also decreased by 26.3 per cent year-on-
year. This contributed to a drop of 23.7 per cent year-on-year in the export value of 141.24 billion baht
during the same period of time.

A spokesperson for FTI’s Automotive Club, Surapong Paisitpatanapong told Thai Enquirer last week
that production could be halved in 2020 if the outbreak lasts until September.

In comparison, there were 2 million cars manufactured in 2019.

Surapong told Thai Enquirer on Wednesday that he is uncertain if the country will be able to produce
more than 1 million cars. The current production level is already at a 30 year low.

“The production in April dropped to the lowest since 1990, when Thailand only used to manufacture
304,000 automobiles a year,” he said.

Meanwhile, he said, the domestic sale of cars so far this year was 30,109, down 65 per cent year on year
due to the drop in people’s purchasing power, while the export of automobiles was 20,326, down 69.7
year on year owing to the economic slowdown.

As reported, domestic sales are down which is 49.9 per cent less than March’s outputs. With the curfew,
travel restrictions and lowered purchasing power due to the outbreak and drought, car sales are also
shrinking by 34.7 per cent to 230,173 units in the first four months of 2020. 

“The value of automobile exports dropped by 65.6 per cent to Bt12.389 billion,” he said, adding that the
FTI has cut its production target for the automotive industry from 2 million to just 1 million.

“We are not really sure if the new target will be achieved because nobody has been visiting car
showrooms even though the Covid-19 situation has improved,” he said.
“We also have to monitor the state of affairs to see if there will be a second wave of infections. If this
condition lasts longer than expected, we will have to evaluate things again.”

Meanwhile, FTI president Suphant Mongkolsuthree said the industrial confidence index in April stood at
75.9, less than the previous month’s 88.

“The index dropped to the lowest since April 2009 due to uncertainty following the Covid-19 outbreak,
the government’s lockdown measures and drought,” he said.

“Some businesses, especially small and medium enterprises, have had to slow down their production
and investment, as well as lay off employees due to liquidity shortages.”

According to the survey, 69.5 per cent of businesses are concerned about the state of the global
economy, especially since the Covid-19 pandemic has caused a drop in purchase orders from overseas.

“Hence, we expect the industrial confidence index in the next three months to drop to 88.8, the lowest
since May 2009,” he said.

He added that the government will consider the option of solving loan issues to help businesses, while
the Bank of Thailand’s Monetary Policy Committee on Wednesday (May 20) cut the key interest rate to
0.5 per cent from 0.75 per cent in a move to help the economy recover.