The Thai ultra-luxury car market is bracing for a decline this year as the automotive industry and broader economy face significant headwinds. According to Charnchai Mahantakhun, managing director of Inchcape (Thailand), the distributor of British car brands Land Rover and Jaguar, the slowdown is being exacerbated by US President Donald Trump’s tariffs on foreign-produced vehicles.
In the first quarter of this year, sales in the ultra-luxury vehicle segment in Thailand plummeted by 16% compared to the same period last year. Charnchai attributes this downturn to the sluggish economy and the looming threat of Trump’s protectionist policies, which are causing prospective buyers to hold back on purchases.
“Car sales in the high-end market are affected by the sluggish economy, which will be worsened by Trump’s policy. This causes prospective buyers not to spend money,” Charnchai explained. The impact of Trump’s tariffs is not limited to the US market; it has global ramifications, with brands like Land Rover and Jaguar, owned by Tata Motors, needing to adjust their business strategies.
Tata Motors is reportedly considering increasing its sales volume in the Asia-Pacific region, including Thailand, as a direct response to the tariff implications. This move could potentially benefit Inchcape (Thailand), which is in discussions with Land Rover and Jaguar to secure a larger sales quota for the Thai market next year. Currently, the company faces limitations on the number of Land Rovers it can sell domestically each year.
The challenges facing the automotive industry are compounded by the overall economic slowdown in Thailand. In response, car companies are ramping up their marketing efforts to attract buyers. Inchcape (Thailand) took a different approach last year by investing 10 million baht in renovating its sole showroom in Bangkok. However, the company has put expansion plans on hold for this year, citing the need to manage its investment budget carefully during these uncertain times.
“We need to carefully manage our investment budget this year because it is difficult to drive up business at a time of slowdown in the car industry and the national economy,” Charnchai said. The company remains optimistic about future growth, with plans to leverage new models like the recently launched Land Rover Defender OCTA, priced at 22 million baht.
While Thailand faces challenges, other markets in the Asia-Pacific region are showing promise. New Zealand is identified as having the greatest market growth potential, followed by the Philippines and Singapore. As the industry navigates these complex dynamics, companies like Inchcape (Thailand) are adapting their strategies to mitigate the impacts of both local economic conditions and global trade policies.
