BANGKOK, Sept 11 (Askume) – Thailand’s main group of manufacturers, including major Chinese and Japanese firms, are cutting production under a government stimulus plan as electric vehicle sales in Southeast Asia’s biggest market remain weaker than expected.
The plan has attracted more than $1.44 billion in investment in new production facilities from Chinese electric car makers such as BYD Auto (002594.SZ) and Great Wall Motors (601633.SS) to help Thailand develop electric vehicles (EVs) .
But with sales falling, partly due to the Bank of Thailand’s tightening of lending requirements, the Electric Vehicle Association of Thailand (EVAT) needs more time to meet the goals of the government’s main stimulus package to support the industry.
“We are working hard to negotiate to push back the production date a little bit,” group chairman Suroj Sangsanit told Askume, outlining one such proposal.
“According to the condition that we have to produce within one year, can we ask for one more year?” said Su Luoji, executive vice president of SAIC, adding that SAIC CP is a joint venture between SAIC and Thailand’s CP Group.
Companies receiving tax breaks and other support under the so-called EV 3.0 plan must produce the same number of vehicles in Thailand this year as they import between 2022 and 2023.
Missing the deadline will make their job difficult next year, as the plan requires them to produce 1.5 cars for every car imported.
Suroy said the main Chinese companies driving the change include BYD, MG Motor (owned by SAIC Motor ) and Great Wall Motors.
BYD and Great Wall Motor did not respond to Askume requests for comment.
Seeking concessions is part of his meetings with Bank of Thailand officials this year, which are part of a broader effort to tackle lower-than-expected sales by the electric vehicle industry.
Narit Therdstersukdi, secretary-general of Thailand’s Investment Commission, which is in charge of the stimulus package, declined to comment without seeking guidance from new Prime Minister Patongtarn Shinawatra’s Cabinet.
debt crisis
Thailand has long been a car manufacturing and export hub, dominated by Japanese brands such as Toyota Motor Corp (7203.T) and Honda Motor Co (7267.T) , which are also EVAT members.
The EV government production incentive aims to convert 30% of annual production of around 2 million vehicles to electric vehicles by 2030.
Suroj said new electric vehicle sales this year would be 43,000 units, which is likely to be lower than the EVAT target of 100,000 units.
They reflect overall weakness in Thailand’s automotive industry, with vehicle production in the first seven months of 2024 falling 17.28% year-on-year to 886,069 units.
Suroj said banks were hesitant to lend EV loans because of the steep discounts, which impacted property prices.
“Credit controls have become tighter as household debt rises, which will make it more difficult to sell,” he said.
Average household debt in Thailand, the highest in Asia, has risen to a record high amid slow economic growth, low incomes and high living costs, a survey showed on Tuesday .
In a June meeting with the Bank of Thailand, details of which have not been made public, EVAT pressed state banks to provide more car loans.
“One of the outcomes of that meeting was that banks can count the income of a household or a family when considering loans,” said Siamnat Panasorn, the group’s vice president.
The central bank did not respond to a Askume request for comment.
