23-10-2023 (BANGKOK) The Federation of Thai Industries (FTI) is maintaining a vigilant watch over the Israel-Hamas conflict with growing concerns that an escalation involving neighbouring Arab nations could negatively impact Thai vehicle exports later this year.
Vehicles stand as Thailand’s top exports to Israel in terms of value, currently amounting to a substantial US$243 million annually. In the first eight months of this year (January to August), Thailand dispatched a total of $124 million worth of vehicles and automotive components to Israel, constituting 1% of Thailand’s overall automobile exports.
The Middle East represents Thailand’s third-largest vehicle market, contributing to 16% of the country’s total exports. This places it behind Australia (28%) and Asia (31%) in 2022. Notably, the Middle East’s robust demand played a pivotal role in propelling a remarkable 19.5% year-on-year increase in Thai vehicle exports during the initial eight months of this year. Saudi Arabia emerges as the prominent market for Thai auto exports within the region.
With mounting concerns regarding the potential expansion of the Israel-Hamas conflict to encompass other Arab nations, Thai automakers are closely monitoring the situation. The implications on Thai vehicle exports could be significant.
The FTI has responded to the evolving situation by revising its initial projection for total Thai vehicle production this year, scaling it down from 1.95 million units to 1.9 million. This adjustment comes in response to subdued sales observed in August.
The revised projection encompasses 850,000 units allocated for domestic sales and 1.05 million units designated for export. Notably, domestic vehicle sales during the first eight months of this year amounted to 524,784 units, marking a 6.21% decline from the corresponding period in the previous year.
