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

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.

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.

“Nobody is buying anything at the showrooms,” he added. “We also have to wait and see if the second wave of the outbreak will hit us as it has in other countries. If the outbreak is not contained by June, manufacturers may also decide to shut down production again.”

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.

Exports also declined by 69.7 per cent due to the slowdown in demand from major trading partners. 

Exports value decreased by 65.2 per cent year-on-year to 12.39 billion baht in April. 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.

Thailand manufactured only 24,711 cars in April with production for exports declining by 81.7 per cent and production for domestic sales receding by 85.4 per cent.

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.

As reported, domestic sales are down by 65 per cent year-on-year to 30,109 units in April, 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. 

Private confidence 

FTI chairman Supant Mongkolsuthree said on Wednesday that the Industries Sentiment Index (TISI) for April dropped down to an 11 year low at 75.9 index points. This is in comparison to 88 points in March and 91.7 points back in December.

Supant said industry confidence is low across the board – from small to large size manufacturers in every industry. They are still concerned with the spread of the pandemic and the nationwide lockdown measures which have lowered consumer demand for various durable products.

He added that manufacturers are now coping by slowing down production and letting workers go. Meanwhile, SMEs are experiencing a shortage of liquidity with lowered farmers’ purchasing power because of the drought. 

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