Here's the paradox at the heart of Thailand's car market right now. The economy is growing at its slowest pace in three decades, household debt remains high, and yet electric vehicles just became the majority of new car registrations for the first time ever. For anyone financing cars here, the old rules for underwriting risk no longer quite apply. Two recent industry briefings, one from the Bank of Thailand (BOT) and one from the Federation of Thai Industries Automotive Industry Club (AIC), show why overall volumes are stabilizing, but the mix beneath those volumes is shifting faster than most lenders' pricing models were built to handle. 

A slow-growth economy still shaped by old crises 

Thailand's growth follows a pattern. Each crisis recovery lands a notch below the last. BOT data shows growth averaging 7.3% before 1997, 5.3% after Tom Yum Kung, 3.6% after 2008, and just 2.4% since COVID-19. The Bank of Thailand's Monetary Policy Committee (MPC) June 2026 forecast projects 1.8% growth for 2026 and 2.0% for 2027 (2.3%/1.8% including stimulus).


That slow growth is why household debt is so hard to bring down. It peaked at 94.6% of GDP in 2021 and has only eased to 86.7% by end 2025, still above the 80% threshold set by the Bank for International Settlements (BIS). We covered the BOT's response in our piece on the BOT's regulatory mandate. 

Hire purchase: Contracting, but improving in quality 

That pressure shows up directly in loan books. BOT data shows consumer credit growing slowly overall, with auto hire purchase the only segment still contracting.


The encouraging side: hire purchase non-performing loan (NPL) are the lowest of any consumer segment and still improving, thanks to debt restructuring and tighter underwriting. Repossessions fell from 41,225 units in 2023 to under 19,000 by Q1/2026, a sign of stronger collections.

The auto market itself: Flat production, reshuffled demand 

Loan performance is only half the picture. The other half shows up in the factories, and in 2025, Thailand's automotive industry hit a milestone it would rather have avoided. Federation of Thai Industries (FTI) and Automotive Industry Club (AIC) data shows production fell 0.9% in 2025 to 1.46 million units, enough for Thailand to slip out of the world's top 10 producers, now ranking 11th. Exports drove the decline, down 5.2%, while production for domestic sales grew 8.6%. 


The vehicle mix has shifted too. Pickups, once the backbone of Thai sales at 43% share between 2010 and 2022, fell to just 23% by 2025, the lowest in decades, as tighter underwriting hit pickup buyers hardest, while passenger cars, lifted by EVs and hybrids, climbed to 65% share.

xEVs are now the majority of new registrations 

This deserves the most attention: in 2025, xEVs overtook ICE vehicles in new registrations for the first time, 54% xEV vs. 46% ICE, up from just 14% in 2022. That is a tipping point, not a gradual trend.


Middle East-driven oil price spikes accelerated this shift further in early 2026, adding exactly the exposure we flagged in our EV residual value analysis: Thailand still lacks reliable EV residual value benchmarks and certified battery health standards, leaving lenders pricing EV contracts with far less certainty than ICE ones. 

Will EVs dominate the Thai automotive market? 

That uncertainty raises an obvious question, will EVs eventually dominate, or is this a messier, mixed transition? AIC's modeling, benchmarked against the wider Southeast Asia trend, suggests EVs could reach 40% to 60% of new vehicle sales by 2035, depending on the policy path. 


Even in the faster scenario, EVs are not projected to fully dominate by 2035. ICE vehicles will keep an important role in rural areas, commercial transport and long-distance driving where charging infrastructure is limited. The realistic outcome is a mixed ecosystem of EVs, hybrids and ICE, which is why underwriting models need to price all three, not just the EV curve. 

What this means for lenders and captives 

Together, these trends set clear priorities: a Financial Institution Business Act deadline to meet, a shrinking hire purchase book needing sharper underwriting and a residual value question mark over the fastest growing product category. Lenders that cannot reprice EV risk, restructure NPLs at scale and meet BOT's disclosure rules at once will struggle to keep pace with players like Toyota Leasing Thailand and Tri Petch Isuzu Leasing, who have already modernized their finance infrastructure. 

Ready to navigate Thailand's shifting hire purchase and EV finance landscape? Talk to NETSOL's auto finance team → 

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