Thailand’s Car Production Declines 13.6% in February Amid Industry Slowdown

Thailand’s automobile sector remains heavily challenged as car output during February 2025 dropped 13.62% year on year to 115,487 units. It is the 19th successive month of weakening, following the 24.63% downturn in January.

The decline is due to weak domestic sales and exports. Domestic sales fell by 26.2% to 572,675 units, 15-year low partly due to tightening of auto loan policies and high household debt levels. Exports were down by 8.8% to 1 million units, affected by global conflicts, competition from electric vehicles and stricter carbon targets in key markets.

Thailand is looking at the electric vehicle segment to drive growth. Mazda Motor Corp has committed to a 5 billion baht ($150 million) investment in manufacturing electric compact SUVs with the goal of producing 100,000 units per year for local and export markets. This action supports Thailand’s effort to draw investment from EV producers by offering tax breaks and subsidies to consumers.

Despite all these efforts, there are still challenges. The Federation of Thai Industries is projecting a small production growth to 1.5 million units in 2025 from 1.47 million units in 2024. The industry however will have to overcome problems including high consumer debt, tight credit conditions and shifting global automobile trends.

As the largest automobile manufacturing hub in Southeast Asia and a major export hub for international automakers such as Toyota and Honda Thailand’s automotive industry continues to be central to its economy. The success of government policies and the sector’s resilience to shifting market forces will be important in shaping the future of this critical sector.