Thailand's automotive industry recorded a recovery in March 2026, supported by rising domestic demand for electric and hybrid vehicles, alongside stable production growth and continued export activity, according to the Federation of Thai Industries.

Vehicle production in March increased by 2.69% compared with the same period last year and rose by 13.11% from February. This followed a 3.43% year-on-year increase recorded in February. Over the first three months of 2026, total car production rose by 5.32% year-on-year.

Surapong Paisitpattanapong, adviser to the chairman and spokesman of the FTI's Automotive Industry Club, stated that the industry is undergoing structural changes driven by the growing adoption of electric vehicles (EVs) and hybrid models.

Production for export remained a contributor to overall output, with export-oriented production increasing by 6.53% year-on-year. Passenger car production for export rose by 19.91%, supported by demand in markets such as Australia, Africa and Europe.

However, exports of completely built-up vehicles declined slightly by 0.64% year-on-year. This decrease was attributed to reduced shipments to the Middle East, which fell by 15.96% following the closure of the Strait of Hormuz.

Thailand serves as an automotive production and export hub in Southeast Asia for global carmakers, including Toyota and Honda.

In March, production trends shifted towards electrified vehicles. Output of hybrid electric passenger vehicles increased by 12.69%, while production of internal combustion engine passenger cars declined by 22.08%. This indicates a transition in Thailand's automotive manufacturing structure in response to global demand for lower-emission mobility solutions.

Domestic vehicle sales also increased during the month, rising by 7.29% year-on-year. The increase was supported by deliveries linked to bookings made at the Bangkok International Motor Show, where total reservations exceeded a six-figure level. Electric vehicles accounted for more than 50% of these bookings.

Passenger battery electric vehicle sales increased by 47.62%, while passenger hybrid electric vehicle sales rose by 23.81%. Sales of electric pick-up trucks also increased by 161.11%, although overall volumes remained relatively low.

Despite the overall rise in domestic sales, the pick-up truck segment continued to decline, with sales falling by 6.36%. This was linked to tighter lending conditions imposed by financial institutions, alongside slower economic growth and income instability among potential buyers. The pick-up segment remains an indicator of purchasing power, particularly among small businesses, farmers and consumers in provincial areas.

The Federation of Thai Industries has projected that vehicle production will increase by 3% in 2026, following a 0.9% decline recorded in the previous year.

Surapong also urged the new government to expedite the submission of its policy framework and the 2027 annual expenditure budget to Parliament to support investment and improve confidence among domestic and foreign investors. It was stated that stimulating industries with extensive supply chains could contribute to growth in the manufacturing production index.

He added that a sustained economic recovery, combined with capacity utilisation exceeding 70%, could support further investment and employment, as well as overall purchasing power.

Thailand's automotive industry in the first quarter of 2026 remains in a transition phase, with electric and hybrid vehicles contributing to domestic market growth, while exports continue to support production levels.