Thailand's May Auto Output Drops 18% as Export Markets Weaken, EVs Rise Domestically

Thailand’s vehicle production contracted by 17.94% year-on-year in May, falling to 114,214 units, as declining exports offset a robust domestic market. The Federation of Thai Industries attributed the slowdown to geopolitical tensions in the Middle East and softening demand in key export destinations.

The downturn brought total production for the first five months of the year to 587,759 units, a 1.13% decrease from the same period last year.

Production for export markets plunged 36.20% in May, according to Surapong Paisitpattanapong, an adviser at the federation’s Automotive Industry Club. Shipments of completely built-up vehicles fell 26.69% to 59,434 units. The primary drivers were a 66.14% collapse in exports to the Middle East, linked to the U.S.-Iran conflict, and a 37.18% slide in the Australia and Oceania market, which faces stricter carbon regulations and rising competition from Chinese electric vehicles (EVs). Consequently, the value of vehicle exports dropped 24.36% to 41.72 billion baht (US$1.28 billion).

In contrast, domestic vehicle sales climbed 10.6% year-on-year to 57,765 units, buoyed by the growing adoption of battery electric vehicles (BEVs). Sales of electric passenger cars surged 61.19% to 18,034 units as consumers sought alternatives to higher fuel costs. Market confidence was also supported by over 150 billion baht in investment during the first five months and government economic stimulus measures.

Despite the positive domestic trend, the core pickup truck segment saw minimal growth of just 0.21%. The EV sector continued its expansion, with new BEV registrations rising 55.14% in May to 21,619 units, bringing Thailand's total registered BEV fleet to 468,757 as of May 31. Motorcycle production also grew, increasing 9.67% to 230,691 units.