Tuesday, May 21, 2024
HomebusinessmotoringCar shipments could falter

Car shipments could falter

The conflict in the Middle East could affect car exports to the region if it is protracted, says the Automotive Industry Club of the Federation of Thai Industries (FTI).

Exports of pickups, which are popular in the Middle East, could decline if the dispute cannot be settled through negotiations, according to the club.

The Thai auto industry depends on exports following sluggish sales in the domestic market, said the club.

Demand for automobiles is high in the Middle East, said Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for the auto club.

“We expect car exports to the Middle East to slow in the fourth quarter this year as logistics and supply chains may be affected if the war continues,” he said.

From January to August this year, Thailand shipped automobiles and auto parts worth US$124 million to Israel, representing about 1% of the country’s total exports.

Last year, the value of all products exported to Israel was $243 million.

The Middle East was the third-largest automobile and auto parts export market for Thailand in 2022, comprising 16% of total exports for the sector, following Asia (31%) and Australia (28%).

The club reported car exports in August increased by 29.4% year-on-year to 87,555 units because of new orders from Australia, the Middle East, Europe, South America, Central America and North America.

During the first eight months of this year, car exports grew by 19.5% year-on-year to 724,423 units.

Domestic car sales were weak in August and if the trend continues, the club may need to adjust its manufacturing target for 2023.

August sales fell by 11.6% year-on-year to 60,234 units, with sales of pure pickups down 36.3% to 19,561 units.

The dip was attributed to financial institutions’ stricter loan criteria as household debt balloons.

Thai household debt exceeds 90% of the nation’s GDP, while public debt is at 61% of GDP this year.

If the club adjusts its manufacturing forecast, the new target will be lower than 1.9 million units as the domestic market sags, said Mr Surapong.

The club already cut its car output target to 1.9 million from 1.95 million, as domestic car sales turned sluggish.

Car manufacturing for the domestic market was expected to decline to 850,000 units, down from the previous projection of 900,000 units, while the production target for export remains unchanged at 1.05 million units.

- Advertisment -

Most Popular