The Thai government explores a trade-in and scrapping program to revitalize its automotive industry enduring its most extreme economic downturn in decades according to both industry executives and sources. The proposed scheme seeks to solve three major automotive issues stemming from declining output, sluggish exports, and weakened domestic sales alongside both rising EV competition and tight credit conditions.

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Discussions about the car trade-in and scrapping initiative are progressing at an initial level with Toyota and other automobile manufacturers and government organisations participating. The Thai unit of Toyota acknowledged its participation in talks to establish "End of Life Vehicle schemes" for removing older models with high emissions.

A trade-in system permits vehicle owners to replace their old cars for price reductions on buying new vehicles while the old vehicles get destroyed. Industry sector representatives propose that automobiles older than ten years should become eligible for scrapping.

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The Thai automotive industry comprising 10% of GDP has suffered a significant reduction in manufacturing output along with diminished market sales. Production reached its lowest level in four years last year and these declines extended into 2024. Chinese automotive manufacturers BYD and Great Wall Motors are expanding their investments throughout Thailand which leads to increased market competition.

The proposed trade-in plan addresses two objectives by boosting demand and safeguarding domestic automakers from their electric vehicle competitors. Car manufacturers support the plan to increase their sales figures.

Sompol Tanadumrongsak the president of the Thai Auto-Parts Manufacturers Association highlighted that automobile manufacturers aggressively advocate for this proposal to boost their car sales.

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Government officials are working together to define rules that determine which vehicles need to be scrapped along with establishing their involvement in the process. This recycling scheme will establish fresh investment opportunities coupled with job creation within Thailand's current limited auto recycling sector.

While discussions are ongoing, key details regarding funding, recycling infrastructure, and management are still being finalized. The industry ministry and Toyota have held meetings to discuss ways to stimulate the sector, but the scrapping scheme has yet to be formally presented to the finance ministry.