Thailand Car Production Increases in May for First Time in Nearly 2 Years

Thailand's car production rose for the first time in nearly 2 years in May. The increase is attributed to improved demand and production levels. Honda Motor Co Ltd reported a 7.3% increase in global sales for May, driven by growth in the Asia-Oceania region. The company's motorcycle business saw a 7.7% increase in sales, while its automobile business saw a 6.7% increase. The financial service business also reported a 7.2% increase in sales.

Thailand's car production rose for the first time in nearly two years in May, marking a significant turnaround in the country's automotive industry. According to the Federation of Thai Industries, car production increased by 10.32% year-on-year in May, following a 0.4% decline in April. This uptick is attributed to improved demand and production levels, reflecting a broader recovery in the global automotive market [2].

Honda Motor Co. Ltd. played a pivotal role in this rebound. The company reported a 7.3% increase in global sales for May, with notable growth in the Asia-Oceania region. Honda's motorcycle business saw a 7.7% increase in sales, while its automobile business saw a 6.7% increase. The company's financial services business also reported a 7.2% increase in sales, indicating a robust performance across multiple sectors [2].

This positive trend is part of a broader shift in Thailand's automotive landscape. The country's electric vehicle (EV) market has been gaining significant traction, with Thailand's EV Vision (30@30 Policy) setting ambitious goals for zero-emission vehicles. By 2030, Thailand aims to achieve a 30% share of zero-emission vehicles (ZEVs) in total production and a 50% adoption rate domestically [1].

In 2024, Thailand's EV production saw a substantial increase, with battery electric vehicles (BEVs) and hybrid electric vehicles (HEVs) experiencing rapid growth. The actual production of BEVs in 2024 was 9,688 units, representing a 58-fold increase compared to the entire year of 2023. This growth reflects a compound annual growth rate (CAGR) of 138% for BEVs from 2020 to 2024 [1].

Despite the strong performance in EVs, internal combustion engine vehicles still dominate the market. However, the growth rate of BEVs and HEVs indicates a significant shift towards electric vehicles. The market penetration rate of electric four-wheelers reached 13% by 2024, highlighting the increasing acceptance of EVs in Thailand [1].

The expansion of EV manufacturing investment in Thailand is another key factor driving the industry's growth. Planned EV production capacity exceeds 500,000 units per year, with a significant increase in the number of newly registered new-type EVs. The EV adoption rate surged from 1.47% in 2022 to 11.26% in 2023, and it is expected to reach 19% by May 2025 [1].

Challenges remain, however. The dominance of Chinese OEMs in the Thai four-wheeler EV market and the need to enhance the competitiveness of local automotive parts suppliers are areas that require attention. Collaboration with Chinese OEMs and integration into the global supply chain could help local suppliers improve price competitiveness and technological capabilities [1].

In conclusion, Thailand's car production rebound in May is a positive sign of the country's automotive industry's resilience and recovery. The strong demand for EVs, driven by government policies and investment in infrastructure, is a significant factor contributing to this growth. As the industry continues to evolve, Thailand's automotive sector is poised for further expansion and innovation.

References:
[1] https://www.metal.com/en/newscontent/103380601
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_P8N3RS00A:0-thailand-car-production-rises-10-32-y-y-in-may/