Thailand cuts vehicle output target as Chinese EVs gain ground
The FTI has lowered this year’s vehicle production target to 1.45 million units as Chinese EVs expand in key export markets and imported EVs affect the domestic supply chain.
- Thailand's Federation of Thai Industries (FTI) has cut its annual vehicle production target to 1.45 million units due to increasing competition from Chinese electric vehicles (EVs).
- The reduction reflects declining exports, as Chinese-made EVs are gaining significant market share in Thailand's key export destinations like ASEAN and Australia.
- Domestically, a surge in EV sales, with over 50% being imports, is displacing locally produced vehicles and disrupting the automotive supply chain.
- The market shift has also caused a sharp drop in sales for the pickup truck segment, which is considered the "backbone" of Thailand's auto industry.
Thailand’s automotive industry is facing serious disruption as Chinese electric vehicles (EVs) take market share in the country.
Chinese EVs are also making inroads into Thailand’s main export markets, prompting the Federation of Thai Industries (FTI) to cut this year’s total vehicle production target to 1.45 million units.
Suwat Supakarndechakul, chairman of the FTI’s Automotive Industry Club, reported worrying figures showing that Thailand produced only 717,212 vehicles in the first half of the year, down 1% from the same period last year.
The revised target of 1.45 million units comprises 900,000 vehicles for export, down 5.26%, and 550,000 vehicles for domestic sales.
Chinese EVs gain ground as Middle East war pressures exports
The main factor behind the decline in Thai vehicle exports is the strong expansion of Chinese EVs in Thailand’s key export markets, including ASEAN, Australia and Oceania.
Suwat explained, “China currently accounts for one-third of global vehicle production capacity, giving it an advantage through low per-unit production costs. Over the past three years, China has produced more than 30 million vehicles every year.”
Thailand, meanwhile, has the capacity to produce 3 million vehicles but is currently using less than half of that capacity.
Exports have also been affected by uncertainty in the Middle East, particularly the closure of the shipping route through the Strait of Hormuz, which caused exports to the region to fall by 38.3% in the first half of the year.
Other factors include US tariff barriers and stricter emissions standards imposed by Thailand’s trading partners.
EV imports surge and affect the domestic supply chain
In the domestic market, electric passenger car sales rose by 93% in the first half of the year to more than 100,000 units.
However, the share of imported vehicles remains a key concern. “More than 100,000 EVs were sold in the first half of the year, and over 50% were imports. This means lost opportunities for domestically produced vehicles and affects the automotive industry’s overall supply chain.”
The pickup segment, described as the “backbone” of Thailand’s automotive industry and using more than 90% locally made parts, has also fallen sharply.
Annual sales have dropped to just 130,000–140,000 units, compared with 300,000–400,000 units previously.
Suwat also offered consumers a reminder amid fierce competition.
Although more than 100 imported models are currently available, consumers should consider “the cost of ownership, the total cost of owning a vehicle. But will there be good long-term support, or could it simply disappear? These are issues consumers need to be aware of.”
