Volvo Confirms Thailand EV Push Despite Market Challenges
Amidst economic headwinds and a volatile global trade landscape, Volvo Car Thailand projects modest sales growth of no more than 5% for 2025. The company plans to mitigate these challenges by focusing on the burgeoning electric vehicle (EV) market and enhancing its after-sales services. This strategic approach is necessary as the Thai automotive industry grapples with weak auto loans, high household debt, and a sluggish economy, factors that have dampened consumer confidence.
Chris Wailes, Managing Director of Volvo Car Thailand and Malaysia, acknowledged the challenging environment, stating, «This will be another difficult year for the Thai automotive industry.» These difficulties stem from the financial pressures faced by Thai consumers, with household debt-to-GDP hovering around a staggering 90% as of the third quarter of 2024. This precarious financial situation has prompted banks and financing companies to tighten lending criteria, further restricting access to auto loans.
Volvo Car Thailand estimates overall domestic car sales to fall between 550,000 and 560,000 units in 2025, a dip from the 572,675 units sold in 2024. The premium car segment, which accounts for a substantial 40% of the total market, is also expected to see flat growth. Despite these projections, Mr. Wailes expressed confidence that Volvo Car Thailand would achieve its 2025 sales target, navigating these challenges through a strategic focus on electric vehicles and customer-centric services.
Adding to the complexity is the unpredictable nature of global trade policies, particularly those emanating from the United States. Mr. Wailes acknowledged the potential impact of evolving trade dynamics under former President Donald Trump, stating that while the company is monitoring the situation closely, it believes its parent company is well-equipped to manage any fallout. He further noted the company’s belief that these policies will not directly impact Volvo Car Thailand, although the potential indirect effects of a renewed US-China trade war, specifically concerning increased Chinese EV exports to Southeast Asia, remain a concern.
The company’s strategy relies heavily on capitalizing on the growing demand for electric vehicles. In 2024, fully electric models comprised a remarkable 80% of Volvo’s total sales in Thailand, demonstrating a significant 24% year-on-year increase. Mr. Wailes also highlighted the potential for plug-in hybrid electric vehicles (PHEVs) to gain popularity in the Thai market due to their relative affordability. This dual focus on both fully electric and hybrid models positions Volvo to cater to a broader consumer base.
Beyond its focus on electric vehicles, Volvo is committed to enhancing its after-sales service offerings. A key initiative is the planned launch of a dedicated battery repair center in mid-2025. This center, along with the introduction of «smart repair» services for minor bodywork damage, aims to provide customers with cost-effective and efficient maintenance solutions, enhancing the overall ownership experience. By combining its focus on innovative EV technology with a commitment to customer service, Volvo Car Thailand aims to not just survive, but thrive, in a challenging and evolving automotive market.
