Domestic car sales in Thailand remained sluggish in March, falling by 29.8% year-on-year to 56,099 units, though the tally is slightly greater than the February total, according to the Federation of Thai Industries (FTI).
The 45th Bangkok International Motor Show, which took place from March 27 to April 7, was expected to pump up car sales. In February, domestic car sales registered 52,843 units.
The sales volume in March 2023 was 79,943 units.
Surapong Paisitpatanapong, vice-chairman of the FTI, said the decrease resulted from three main factors that have plagued the automotive industry since last year: stricter auto loan criteria from banks, a weak economy, and the delay in state budget spending for fiscal 2024.
"We still hope the situation will improve in the second half of this year, driven by more spending and investment from the state and business sectors and tourism growth," said Mr Surapong, also spokesman for the FTI's Automotive Industry Club.
The House of Representatives has already voted to approve the 3.4-trillion-baht budget bill for fiscal 2024 in March and is likely to convene a special session next month or in June to deliberate the budget bill for the 2025 fiscal year, which starts this October.
Bankers remain cautious about lending money to prospective car buyers, especially in the pickup segment, because of worries over non-performing loans.
Thailand's household debt-to-GDP ratio is relatively high at 91%, compared with an average of 60% among other emerging economies.
Sales of pure pickups and pickup passenger vehicles in March plummeted by 45.2% and 46.6% year-on-year to 16,212 and 3,436 units, respectively, Mr Surapong said.
From January to March, total car manufacturing in Thailand fell by 18.4% year-on-year to 414,123 units, with 140,443 units produced for domestic sales and 273,680 units manufactured for export.
Mr Surapong attributed the decrease partly to a need to import electric vehicles, as EV assembly factories in the country are not ready for commercial operation.
"We believe the number of locally made EVs will increase in the third quarter," he said.
The club earlier set a 2024 target for Thailand's car production at 1.9 million units, a year-on-year increase of 3.1% from 2023.
Car exports were a key driving force for the automotive industry in March, increasing by 7.1% from February to 95,089 units, though the numbers decreased by 3.3% compared with March 2023.
Good sales were seen in Australia, the Philippines, the US, Mexico and the UK.