[SMM Analysis]Thailand's Pickup Truck Trade-in Policy: A Key Move to Boost the Auto Market?

Thai Finance Minister Pichai Chunhavajira recently signaled that the Thai government is planning a policy aimed at stimulating the automotive consumer market, specifically by offering tax incentives to owners of pickup trucks aged 20 to 25 years for trading in their old vehicles for new ones.

The proposal of this policy stems from the decline in sales in the Thai automotive market, particularly in the pickup truck segment. As Southeast Asia's automotive manufacturing hub, the automotive industry holds a pivotal position in Thailand's economy, accounting for 10% of the country's GDP. However, since the beginning of 2025, pickup truck sales have been sluggish, with a 17% YoY decline from January to May, prompting government concern.

From the preliminary vision of the plan, the key point lies in tax incentives. Although details are yet to be finalized, it is expected to be a substantial subsidy, and there may be specialized institutions, such as the Thai Credit Guarantee Corporation, providing support for relevant loans to alleviate the financial burden on vehicle owners trading in their old vehicles for new ones, enabling more people to afford and be willing to purchase new vehicles.

The significance of this plan extends beyond boosting sales; it also carries the responsibility of driving the development of Thailand's automotive industry. The automotive industry involves numerous upstream and downstream enterprises, forming a vast industry chain that spans from automotive parts supply to vehicle manufacturing, and then to sales and after-sales services. If the policy can effectively stimulate consumption, it will drive the recovery of the entire industry chain, increase employment opportunities, and inject momentum into economic growth.

However, the advancement of this plan also faces some practical challenges. The implementation and supervision of the policy require substantial resources, such as fiscal expenditures and administrative costs, which may lead to an increased financial burden on the government. Moreover, ensuring the fairness of the preferential policies and preventing policy loopholes from being exploited are also major challenges.

Overall, Thailand's pickup truck trade-in plan is a proactive attempt by the government in response to the automotive market's predicament. Its policy significance is profound, with the potential to drive the upgrading of automotive consumption while supporting Thailand's economic stability and development. Of course, the policy still needs to be continuously refined and optimized during implementation to address potential issues and ensure the realization of expected economic and social benefits.

SMM New Energy Industry Research Department

Cong Wang 021-51666838

Xiaodan Yu 021-20707870

Rui Ma 021-51595780

Disheng Feng 021-51666714

Yujun Liu 021-20707895

Yanlin Lü 021-20707875

Zhicheng Zhou 021-51666711

Haohan Zhang 021-51666752

Zihan Wang 021-51666914

Xiaoxuan Ren 021-20707866

Jie Wang 021-51595902

Yang Xu 021-51666760

Boling Chen 021-51666836