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30 Dec 2020

Econ Digest

Thai Auto Industry 2021: With no further lockdowns, car sales may exceed 850,000 units

        The domestic auto market has been severely affected by the COVID-19 pandemic. KResearch projects that sales in the Thai automotive industry in 2020 will reach 770,000 units, a contraction of 23.6% YOY. However, the trend for vehicle sales in Thailand will have a chance to rebound in 2021, provided that the economy improves, and that the government does not implement lockdown measures to control the spread of COVID-19. KResearch projects that domestic car sales in 2021 will expand in the range of 7 to 11 percent to 825,000 – 855,000 units, with cars powered by electricity or cars in the xEV category expected to enjoy exponential growth.

         When automakers begin to enter the market of electric vehicles priced not exceeding 1 million baht, it will open up the market to a larger consumer group. KResearch views that in 2021, automakers will begin to push HEV and PHEV vehicles to be more standardized. It is expected that vehicles in this segment will generate sales of 48,000 to 50,000 units, or growth of 10 to 23 percent.  As for BEVs, although they have substantial growth opportunities, their sales volume will not be very high because they belong to a niche market with sales of 4,000 to 5,000 units, or growth of 176 to 245 percent. In the future, the main factor supporting the growth of BEV vehicles will be that the government and private sector will join forces to enhance market confidence. The current market has purchasing power, but still lacks confidence in the coverage of electric car charging stations. For this reason, if the goal is to speed up the process of making BEVs and PHEVs be seen as standard vehicles, expanding charging stations to cover the whole country will create confidence for buyers, which will be an important accelerating factor.

        As for internal-combustion vehicles or ICEs, there will be good growth opportunities in 2021. In addition to the low comparison base in 2020, the economy, which is expected to gradually recover next year, may help stimulate the sales of ICEs. This will be especially the case for SUVs in line with market trends and for pickup trucks that will grow in line with the growth trends of various industries, which will boost sales of ICE vehicles to 773,000 to 80,000 in 2021, or an increase of 5-8% over 2020.

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Econ Digest