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Thailand Auto Finance Market Growth Rate, Revenue, Size and Trends to 2029

 

The Thailand auto financing market is on its transforming journey and is growing at a steady pace despite various economic challenges. This growth is driven by the rise in electric vehicle (EV) adoption, increase demand for used vehicle financing, and advancement in financial technology which makes accessing auto loans more convenient. The Thailand auto financing market is dominated by banks and their subsidiaries due to their competitive interest rates and extensive customer base. 

Who is Leading the Auto Financing Industry?

  • The Thailand auto financing Industry is moderately fragmented with domestic banks holding majority of shares due to their extensive branch networks and customer bases. Major banks that dominate the market are Kasikornbank, Bangkok Bank, and Siam Commercial Bank, they provide financing services at competitive rates. 
  • Non-banking financial companies (NBFCs) that manage about 6.5% of the market as of 2024, cater to niche markets like used vehicles and customers with limited access to banking services. Additionally, the international captive finance companies like Toyota Leasing Thailand and Mercedes-Benz Leasing are capturing the market. These companies offer promotional financing rates that are usually lower than the traditional banks, leading them capturing 29% share in the captive market space as of 2024.

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Government's Role in Electrifying Thailand's Roads 

The government of Thailand has adopted policies to promote the use of electric cars. The government has lowered import taxes for components, raised incentives, subsidized electric vehicles and infrastructure projects, and initiated spending of over $56 million in 2024. They are aiming to manufacture over 750,000 EVs each year by 2030. This has also made companies such as BYD and MG Motors invest more into the county, resulting in an increase of investment by 35% to $12.7B in the first half of 2024.

Increasing Demand for Used Vehicle Financing

In 2024, it was estimated that used vehicle loans constituted over 30% of all auto loans offered, substantiating the assertion that automobile financing is serving as a significant growth factor for the Thailand auto market. The growth in demand can be attributed to the consumer’s shift towards more affordable vehicle options priced within $ 5,800 to $ 17,400. In 2024, used car loans did exhibit stronger credit growth of around 7%- 10% per year when compared to the average 6-8% interest rates.

Rising Challenge of High Household Debt 

One of the major challenges in Thailand auto financing market is high household debt level, which stood at 89.6% of GDP in early 2024. This results in stricter credit approval processes, and reduced consumer purchasing power particularly for non-essential vehicles. In early 2024, Thailand’s automotive industry suffered 25% drop in sales compared to previous years. 

 

Future Outlook

The outlook of Thailand auto financing Sector looks promising. The market is expected to cross $54.29 billion by 2029. The Thailand auto financing market is driven by rise in used vehicle financing, and shift towards more sustainable automotive solutions, such as electric-vehicle (EVs). However, the challenge of high household debt and economic uncertainties results in car production falling by 20.11% year-on-year in early 2024. Market players that can balance this risk with customer centric innovations will lead this competitive space. 

Consultant at TraceData Research In their latest publication “Thailand auto financing Market Outlook to 2029: By Market Structure (Banks, NBFCs, Captives), By Financial Institutions (Traditional Bank Loans, Multi-Finance Loans, Leasing), and By Type of Vehicles (New Vehicles, Used Vehicles, Electric Vehicles)” believe that investing in AI-driven credit assessment technologies, and developing special EV financing packages will attract tech-savvy consumers leading to increased demand for auto financing in Thailand. 

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TraceData Research

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 +91 9266849840

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