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11 Apr 2025

Econ Digest

Domestic car sales in 2025 may total around 530,000 units amid economic volatility

คะแนนเฉลี่ย
•    In 2025, domestic car sales are projected to drop to 530,000 units, falling by 7.5% YoY. This decline stems from persistent economic headwinds affecting auto lending, compounded by new challenges such as the recent earthquake and US tariff hikes, which have impacted Thailand’s key revenue sources.
•    The xEV market is expected to grow significantly, capturing a 48% share of total car sales in 2025 (based on energy-type classification). As a result, Chinese automakers, which primarily focus on the xEV segment, are expected to increase their market share to 19% (based on classification by country of origin).

Thailand’s car sales in 2025 may continue to contract by 7.5%, declining to 530,000 units (Figure 1).
        In 2025, the domestic automotive market is expected to face another challenging year due to several surrounding factors, including:
•    Persistently high non-performing loans and weak purchasing power carried over from last year
•    Earthquake impacts that have affected income in the tourism sector
•    The U.S. decision to raise import tariffs on Thai products to as high as 36%, affecting the export sector
        These pressures mean that concerns over extending new auto loans will continue, even though the government has introduced measures such as the “Pickup Truck with Treasury Guarantee”. While this measure is expected to provide some support for pickup truck sales, its impact will be limited as the underlying fundamental factors remain weak.
The xEV automotive market continues to grow, with its market share expected to rise to 48% in 2025 (Figure 2)
Although the overall automobile market is contracting, the xEV segment—vehicles powered by alternative energy—continues to grow, driven by consumer demand for energy cost savings. Growth is led by hybrid vehicles, followed by BEVs and plug-in hybrids, which are currently concentrated in the passenger car segment.
        This trend is expected to push xEV passenger cars to capture as much as 55% of total passenger car sales in 2025, while xEV commercial vehicles are projected to hold only a minimal share of about 1% of total commercial vehicle sales.
By manufacturer nationality, Japanese automakers—currently the market leaders in Thailand—focus primarily on hybrid xEVs. Chinese automakers emphasize BEVs and are increasingly building the plug-in hybrid market this year. Western automakers, meanwhile, concentrate on plug-in hybrids (Figure 3).

Chinese automakers have been increasingly well received by the market
        At the Motor Show 2025, Chinese automakers were found to be rapidly gaining market share in Thailand’s automotive sector. Vehicle bookings at the latest auto exhibition revealed that, for the first time, Chinese brands accounted for more than half of total reservations (Figure 4). Combined with the accelerating growth of the xEV market in Thailand noted earlier, this development positions Chinese automakers to potentially increase their share of the Thai automotive market to 19% (Figure 5). This is driven by China’s leadership in the BEV segment in Thailand, and in the near future, they are expected to become leaders in the plug-in hybrid market as well.
        Looking ahead, several factors should be closely monitored as they may influence the direction of the automotive market. These include potential government negotiations between Thailand and the United States to reduce import tariffs, which would support the export-oriented manufacturing industry; measures to stimulate investment, tourism, and domestic spending to enhance economic circulation; and additional initiatives to boost the automotive market, such as the 'Car Trade-in' program.

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