Middle East War Crushes Vehicle Exports by 91.76%, Lowest in 5 Years
Thai vehicle exports to the Middle East collapsed 91.76% in April to a five-year low due to the U.S.-Israel-Iran conflict closing the Strait of Hormuz. The automotive industry is considering downward revisions to its 2025 production target
The Federation of Thai Industries is closely monitoring the prolonged three-month conflict and has downward revised this year's automotive production forecast, with April Middle East exports plummeting 91.76% to a five-year low.
According to Surapong Paisitpattanapong, advisor to the automotive industry group and spokesman for the Federation of Thai Industries (FTI), April 2025 vehicle production reached 103,794 units, down 0.44% year-on-year. Vehicle exports declined 8.43% to 60,190 units.
Thai exports to the Middle East market dropped to just 993 units from 11,053 units, representing a 91.76% decline—the lowest in five years. The collapse is attributed to the conflict between the U.S., Israel, and Iran, which resulted in the closure of the Strait of Hormuz, making vehicle exports impossible. Declines were also recorded in European, Central American, and South American markets.
Domestic production reached 36,532 units, down 1.70%, with pickup truck sales falling 9.7% due to stricter credit lending policies from financial institutions. Weak domestic economic growth, low industrial production indices, and concerns about investment and employment have weakened consumer purchasing power. Global economics remain threatened by international conflicts and trade wars.
"These factors, especially declining pickup truck exports to the Middle East due to the war and the Strait of Hormuz closure, could cause export production to miss this year's 950,000-unit target if the Middle East conflict extends beyond three months," the statement said.
Despite these challenges, April domestic vehicle sales rose 2.54% year-on-year, driven by delivery of pre-ordered electric vehicles from the Bangkok International Motor Show in late March-early April. Rising oil prices from the Strait of Hormuz closure, combined with new model launches and one company's new truck production facility, contributed to the growth.
First quarter 2025 economic growth of 2.8% and investment projects approved by the Board of Investment (BOI) could support stronger growth if investments are deployed this year. The government's 400-billion-baht loan to reduce energy imports and increase investment should also boost employment.
However, the FTI will closely monitor the conflict through May-June to assess its duration before revising the 2025 production forecast. Current targets remain 1.5 million units total: 950,000 for export and 550,000 for domestic sale.
A major concern is parts suppliers requesting price increases citing the Middle East conflict, which would further depress sales and production. The FTI has urged parts and vehicle manufacturers to maintain price discipline while consumer purchasing power remains weak.
