Car prices in Thailand are plummeting, a trend reflecting the weakening purchasing power of the middle and lower classes, according to economists.

This reduction could lead to decreased consumption, employment, and production in the automotive industry—a crucial sector of the Thai economy.

Amonthep Chawla, senior vice president and head of research at CIMB Thai Bank, explains that the drop in car prices, though driven by a price war, signals a significant decline in purchasing power.

This especially impacts the agricultural sector, further affecting related businesses.

One worrying concern is that falling car prices might cause consumers to abandon loan repayments, leading to more car repossessions.

TTB Analytics projects a substantial decline in the Thai automotive industry in 2024, with car sales down 23.8% in the first five months compared to the previous year, possibly marking the steepest decline in 15 years.

Factors include market saturation, long car usage, changing consumer behavior, postponed purchases, and a shift towards renting.