Thailand’s factory output falls in December amid declining car production

Thailand’s Manufacturing Production Index (THMPI) contracted by 2.11% year-on-year in December, a steeper drop than the 0.50% decline forecasted in a Reuters poll, the Industry Ministry reported. The downturn was largely driven by weak automotive production and sluggish consumer demand.

This follows a 3.58% annual decline in November, marking a continued slowdown in the sector. Car production fell 17.37% in December, marking the 17th consecutive month of decline due to falling domestic sales and weaker exports, according to the Federation of Thai Industries.

Challenges Weighing on Output

High production costs and competition from low-cost Chinese imports further strained the sector, according to Passakorn Chairat, head of the ministry’s Industrial Economics Office.

Signs of Resilience

Despite these challenges, government stimulus programs and stronger exports provided some support to manufacturing activity, Passakorn noted. However, industry-wide concerns remain as Thailand’s automotive sector struggles to regain momentum.