Thailand's Auto Industry Faces Crisis Amid Soaring Debt and EV Shift

Thailand's automobile industry, valued at $53 billion, faces a challenging future due to high domestic debt and increasing global shift towards electric vehicles. With production and job cuts, the sector is struggling to stay afloat. Government and industry leaders are seeking solutions to boost output and retain market share.

Thailand's $53 billion automobile industry is grappling with a precarious future as high domestic debt and the global shift to electric vehicles (EVs) challenge traditional car sales.

The crisis, centered in Southeast Asia's largest car production hub, has prompted output and job cuts, pushing the government to enact measures to reverse the downturn. Companies like Techno-Metal, producing parts for Toyota and Mitsubishi, have significantly reduced their workforce and working hours due to dwindling orders.

Domestic production dropped 20.6% year-over-year in August, and domestic sales hit a 14-year low. The industry's forecast to produce 1.7 million vehicles this year, down from 1.9 million in 2023, with a significant portion earmarked for exports. With household debt at $484 billion, new car loans are plummeting and non-performing loans rising. Industry groups are lobbying for incentives to attract foreign manufacturers of internal combustion and hybrid engines to stave off further decline.

(With inputs from agencies.)