ECONOMIC FACTORS AFFECTING AUTOMOBILE SALES IN THAILAND

Abstract

This study aimed to (1) examine the relationships between economic factors and automobile sales in Thailand and (2) analyze the effects of economic factors on automobile sales. A quantitative research approach was employed using secondary time-series data on an annual basis covering a 35-year period from 1992 to 2026. The economic factors examined included gross domestic product (GDP), inflation, interest rates, unemployment rates, and oil prices. The data were analyzed using Pearson correlation analysis, the Augmented Dickey-Fuller (ADF) test for stationarity, multicollinearity diagnostics using the Variance Inflation Factor (VIF) and Tolerance, and multiple regression analysis. The findings revealed that inflation and oil prices had strong negative relationships with automobile sales in Thailand, consistent with economic demand theory. The stationarity test indicated that all variables were non-stationary at the level but became stationary at the first difference, indicating that the variables were integrated of order one, I(1). The multicollinearity analysis, with inflation controlled in the model, indicated no substantial multicollinearity problems for the interest rate and unemployment rate, whereas GDP and oil prices exhibited relatively high multicollinearity with other independent variables. The multiple regression analysis further indicated that inflation had a statistically significant negative effect on automobile sales in Thailand at the .01 significance level. These findings suggest that increasing inflation can reduce consumers’ real purchasing power and consequently discourage purchases of durable goods such as automobiles. The results highlight the importance of macroeconomic stability, particularly price stability, in supporting automobile demand and sustaining the development of Thailand’s automotive industry.

Keywords: Economic Factors, Automobile Sales