Bangkok, Krungthai COMPASS points out that EV 3.0 measures are starting to operate. Push Thai car production to continue recovering But there are still pressure factors from weak purchasing power. and continuously strict lending standards
Krungthai COMPASS publishes analysis on ‘EV 3.0 measures start to operate pushing Thai automobile production to continue recovering,’ indicating that the Thai automobile manufacturing industry is still in the recovery phase. From the COVID crisis and Supply Chain problems, it is expected that in 2024, Thai automobile production will expand 4.8%YoY to reach 1.97 million vehicles, returning to a level similar to the period before COVID-19 (2019). 2019) with a production total of 2.01 million vehicles, considering that there are 2 main supporting factors that cause the total production of automobiles in Thailand to increase:
1. Various automakers participating in the EV 3.0 measures will begin producing electric cars in Thailand. Initially, it is estimated that the results o
f the EV 3.0 measures will help increase the production of electric cars by approximately 5-70,000 units, or equivalent to 3-4. % of total car production in 2024, which new Upside is coming And most recently on December 19, 2023, the Cabinet passed a resolution approving EV 3.5 measures to be enforced during 2024-2027 to promote the continued expansion of the electric vehicle industry. and push Thailand to be a center for producing electric vehicles. This will have a positive impact on automobile production in the future.
2. Global automobile demand is likely to gradually recover. and the demand for internal combustion engines (ICE) that is expected to continue to dominate the world market for another 6-7 years. It is expected that the total production of automobiles for export in Thailand in 2024 has the opportunity to increase. to reach the level of 1.13-1.16 million vehicles, or an expansion of approximately 4-8%YoY following global car sales that continue to gradually recover. Thai car exports still have
the opportunity to continue expanding in 2024, especially in the Asian countries (excluding China) and the Middle East which holds a market share of nearly 50% of the value of automobile exports in 2022.
Krungthai COMPASS estimates that the total production of automobiles for sale in the country in 2024 will be at a stable level of 0.805 million units, likely to be pressured by weak purchasing power. And lending standards are likely to continue to be strict due to measures taken by the BoT after the ratio of household debt is still as high as 90.7% to GDP. As a result, the BoT hastened to issue various measures to solve the household debt problem, such as granting loans. Responsible Lending, which came into effect on January 1, 2024, requires financial institutions to not encourage consumers to incur more debt than they have. Including having to evaluate Affordability of the debtor to cover the debt burden and have residual income after deducting debt installments Sufficient for living This may cause some co
nsumers to be unable to access credit. This is a factor that puts pressure on car sales. and has a continuous impact on the overall car production in 2024
However, entrepreneurs still face challenges that may affect their businesses both in the short and long term. From the risk factors in 1. Lending standards are likely to continue to be strict. 2. Transition Risk from efforts to reduce greenhouse gas emissions 3. Policy guidelines for banning the sale of internal combustion vehicles in many countries and 4. Israel-Hamas war situation.
Source: Thai News Agency