A mix of internal economic challenges, shifting consumer preferences, and geopolitical risks are reshaping Thailand’s auto industry outlook. The Kasikorn Research Centre projects that car sales will fall to 565,000 units in 2025, down from previous expectations. The downturn is prompting a contraction in dealership numbers, with total revenues forecast to decline by 5.6%.
Production levels are also under pressure. Surapong Paisitpatanapong, a spokesperson for the Automotive Industry Group at the Federation of Thai Industries, told Prachachat Business that vehicle output during the first five months of 2025 reached just 594,492 units, a year-on-year decrease of 7.83%. He noted that this makes the full-year production target of 1.5 million units increasingly unlikely, adding that while May saw a rare uptick—up 10% to 139,186 units—this was primarily driven by battery electric vehicles (BEVs), which jumped 641.16%, and plug-in hybrid vehicles (PHEVs), which rose 130.49%.
Industry insiders point to a growing preference for electric vehicles, especially those offered by Chinese manufacturers, as a contributing factor in reshaping the competitive landscape. These brands, which hold a strong foothold in the BEV and PHEV market segments, are expected to expand further, even as dealership growth among Chinese carmakers begins to slow. Between 2024 and 2025, total dealership numbers are projected to decline from 2,197 to 2,146. While Japanese and Western brands are forecast to drop from 1,660 to 1,566 outlets, Chinese brands are expected to rise from 537 to 580.
However, not all Chinese automakers are immune to challenges. NETA, a prominent EV manufacturer, has encountered liquidity issues affecting its Thai operations, including unpaid dealer debts and shortages of spare parts. This has caused its dealership network to shrink from over 60 to just around 20.
Dealers are responding to the market contraction in various ways. Some are switching to a sales-only model without inventory, others are shifting toward after-sales services, while several are transitioning to Chinese car brands. Mercedes-Benz (Thailand), for example, announced that Benz Star Flag Co. Ltd. will no longer operate as an authorised dealership from July 1, 2025. Benz Metro Autohaus has also ended its affiliation, with plans to partner with a new, undisclosed Chinese carmaker.
Japanese automakers are reporting mixed forecasts. Toyota Motor Thailand’s Executive Vice President, Supakorn Rattanawaraha, expects a modest recovery with a 5% increase in sales to 600,000 units this year, targeting a market share of 38.5%. In contrast, Suzuki Motor Thailand Vice Chairman Wallop Trirerkngam anticipates a sales decline of 5%, down to 545,000–570,000 units, citing waning consumer purchasing power and political instability as key factors.
To remain competitive, companies like Toyota and Suzuki are enhancing after-sales services. Toyota has launched a nationwide “Toyota Trusted Services” initiative across more than 450 service centres. Suzuki, meanwhile, is expanding its parts and service network, recently launching a new centre in Don Chan, Chiang Mai, with plans to grow to 95 outlets nationwide.
The ongoing developments reflect a broader strategy by both Thai and international automakers to adapt to evolving consumer behavior, rising operational costs, and competitive pressures from new market entrants, particularly in the electric vehicle sector. The data and insights cited in this report were sourced from Kasikorn Research Centre, Prachachat Business, and statements from senior representatives of Toyota, Suzuki, and Mercedes-Benz Thailand.
