Thailand Auto Industry Faces a Downturn Amid Flood of Low-Cost Chinese EVs
The Thailand auto industry downturn, often dubbed the ‘Detroit of Asia,’ is navigating its sharpest decline in years. Light vehicle sales in 2024 plunged by over 25 percent down to just under 573,000 units and marked the weakest performance since the 2009 financial crisis.
A core driver of this slump? A dramatic influx of low-cost Chinese electric vehicles (EVs) swamping the market. At least nine major Chinese brands, including BYD, Neta, Great Wall, Changan, GAC AION, and SAIC MG, have aggressively entered Thailand, spurred by generous EV subsidies and local production incentives.
Flooded with discounted EV models featuring modern tech normally reserved for luxury cars and steep markdowns, such as BYD slicing nearly 40 percent off its Dolphin sedan, the market turned into a fierce “price war” battleground. Expecting more discounts, the general car buying public are delaying the decision to purchase in the hope for even greater discounts.
This intense pricing pressure destabilized the domestic auto landscape. Sales of traditional gasoline vehicles tanked. Japanese giants like Toyota, Honda, Suzuki, and Subaru have since scaled back operations in Thailand and even announced plant closures and consolidation moves. Under such strain, Thailand’s supporting ecosystem has also suffered: nearly 2,000 auto-related factories have shuttered in recent times.
Meanwhile, the EV setbacks haven’t spared all. Smaller Chinese brands like Neta, initially capturing around 12 percent of the EV segment in 2023, have seen market share collapse to just 4 percent amid stiff competition and financial stress.
The Thailand auto industry downturn is now compounded by economic headwinds, high household debt, tighter credit, and an oversaturated EV market defined by aggressive pricing.. Navigating this “red ocean” will demand strategic recalibration from both policymakers and industry players to restore balance in the industry.
