Thailand’s car exports may decline by more than 6% in 2022 ... Russia-Ukraine war affects both supply and demand (Current Issue No.3311)

The Russia-Ukraine war has become a major factor having far-reaching effects on the global automotive industry, aggravating the issue of auto parts shortage since Russia and Ukraine are both key producers of many raw materials used in the production of integrated circuits and electric car batteries. Meanwhile, the sanctions imposed on Russia have accelerated global inflation. This has eroded consumers’ purchasing power, which leads to decreased demand for luxury products such as cars.
The impacts on Thailand’s automotive production base have not been so severe as what its European counterparts have faced, owing to different circumstances. More than one-third of countries that import cars from Thailand have been relatively unaffected by inflationary challenges, as they are benefiting from rising commodity prices. However, supply shortages stemming from the prolonged war and sanctions on Russia will inevitably put pressure on Thailand’s automotive production and car exports in the forthcoming period.
Based on these key negative factors, KResearch projects that the total volume of Thai auto exports in 2022 will tend to drop to a range of 850,000 to 900,000 units (-6.0 percent to -11.0 percent YoY). Any improvement in this year’s export figures will depend on how quickly the war between Russia and Ukraine is settled, with the sanctions on Russia lifted; and whether or not some Chinese carmakers - among new players in the Thai market - will be able to export their cars as previously planned.