BANGKOK — Thai car market struggles with dealer closures or brand changes Economic and political headwinds are weighing heavily on Thailand’s car market. The Kasikorn Research Centre reports that more than 50 car dealerships are set to close this year.
Car Production Unlikely to Hit Target
Surapong Paisitpatanapong, spokesman for the Automotive Industry Group of the Confederation of Thai Industry, told Prachachat Business that several factors, particularly the general economic situation and possible Trump-era tariffs, could affect the competitiveness of the Thai automotive industry in the global market.
As a result, he believes that Thailand’s vehicle production target of 1.5 million units for 2025 is likely to be revised downwards. This original target included 1 million units for export and 500,000 for domestic sales.
“In the first five months of the year, production totalled 594,492 units, a decrease of 7.83%. It is clear that we will not reach 1.5 million units this year,” he said.
While there was an increase in production in May, 139,186 units, up 10%, the first increase in 21 months, this growth was mainly driven by battery electric vehicles (BEVs), up 641.16%, and plug-in hybrids (PHEVs), up 130.49%.
This reflects the growing demand in the market and the fact that electric vehicle manufacturers have started to produce vehicles under government incentive programmes.
Dealers Burdened by High Costs
The Kasikorn Research Centre estimates that car sales will fall to 565,000 units in 2025, causing total dealer revenues to shrink by 5.6%. The car dealership business continues to be under pressure from declining new car sales and increased market competition.
Added to this are rising costs due to unsold stock and high interest rates. Dealers are forced to adapt, some are shifting to pure sales offices without stock, increasing their service turnover or switching to representing Chinese car brands.
50 Showrooms to Close, Chinese Brands Expand
Due to declining sales and increasing competition, Kasikorn Research estimates that the number of car dealerships will fall from 2,197 in 2024 to around 2,146 in 2025, a loss of 50 showrooms. Japanese and Western brands are expected to see the sharpest decline, particularly in sales of internal combustion engines and commercial vehicles.
Meanwhile, Chinese car manufacturers could continue to expand, especially in the xEV segment. PHEVs and BEVs, which are mainly sold by Chinese brands, are becoming increasingly popular. However, the growth of car dealerships of Chinese brands is also slowing down.
In 2024, there were 2,197 showrooms: 1,660 from Japanese and Western brands and 537 from Chinese brands. By 2025, the total number is expected to drop to 2,146, with the number of Japanese and Western car showrooms falling to 1,566 and the number of Chinese showrooms rising to 580.
Price Wars and Dealer Shake-ups
Prachachat Business also reports that Chinese brands in Thailand have their own challenges. A clear example of this is NETA, an EV brand whose parent company is struggling with liquidity issues that have also impacted its Thai operations. These include unpaid debts to local dealers and a shortage of spare parts.
NETA dealers are now rushing to clear unsold stock, leave the network or switch to other brands. The number of NETA dealers has fallen from over 60 to around 20.
Other dealers are also switching brands, either from Japanese to Chinese or from one Chinese brand to another.
Benz Dealers Close or Change Brands
Mercedes-Benz (Thailand) has informed its customers that the Benz Star Flag Co, Ltd, dealership, which has been in operation since 2013, will no longer function as an official sales or service centre from July 1, 2025. Customers are advised to visit other authorised dealerships instead.
Similarly, Benz Metro Autohaus has ended its affiliation with Mercedes-Benz. Managing Director Burin Boonvisut explained that the company will become a dealer for a new Chinese brand that has not yet been launched in Thailand. Details remain confidential for now.
According to sources at Mercedes-Benz Thailand, these exits were mutual decisions. The company assured that customers of the two departing dealers will continue to be fully serviced and that the brand will continue its service in the remaining 31 showrooms across the country (15 in Bangkok and 16 in other provinces).
Mixed Forecasts from Japanese Automakers
Supakorn Rattanawaraha, Executive Vice President of Toyota Motor Thailand, expected a gradual recovery in the car market this year and a 5% increase in total sales to 600,000 units. Toyota is aiming for sales of 231,000 vehicles, which also represents an increase of 5%, giving it a market share of 38.5%.
Wallop Trirerkngam, Vice Chairman of Suzuki Motor (Thailand), forecasts sales of 545,000–570,000 units in 2025, a decline of around 5% compared to 2024. He attributes this decline to weakening consumer purchasing power and dwindling investor confidence due to general economic uncertainty and political instability.
In response, Japanese car manufacturers are stepping up their after-sales services. Toyota, for example, has launched the “Toyota Trusted Services” campaign in over 450 service centres and 250 body and paint shops across the country.
Suzuki is also working to retain dealers attracted by Chinese competition. Wallop Trirerkngam said Suzuki is expanding its service and spare parts network to ensure standardised service at all locations. This year, Suzuki opened a new service centre in Don Chan, Chiang Mai, and plans to expand its service network to 95 centres nationwide to give customers wider and faster access.
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