Thailand’s motorcycle market should record more sales in the final quarter of this year thanks to government stimulus measures that are expected to increase consumer purchasing power and lift business confidence, says Thai Honda, a manufacturer and distributor of motorcycles and multi-purpose engines.
The recovery is expected to be fuelled by an uptick in the granting of auto loans by banks and car financing companies as they are likely to consider relaxing the lending criteria, said Samphan Kwanjai, general manager of Thai Honda.
The projection of more loans being granted is based on a decline in non-performing loans among car buyers, following banks’ months-long strict criteria in lending money amid the high level of household debt and the state’s 10,000-baht cash handout scheme that helped motorcycle owners partly repay their loans.
“We have a new government that wants to stimulate the economy in the short term,” said Mr Samphan.
“We are positive about the government’s efforts that should increase people’s spending.”
However, Thailand is continuing to face economic uncertainties, caused by internal and external factors, during the second half of this year, which could affect the automotive industry, said Yuichi Shimizu, president of Thai Honda.
Low prices of agricultural products can weaken people’s purchasing power while the global economic slowdown will affect the Thai economy, he said.
Thai Honda expects its motorcycle sales to increase by 2% year-on-year to between 1.36 and 1.4 million units in 2025 while total sales of motorcycles in the domestic market are expected to increase by 1% to 1.7-1.75 million units.
From January to August this year, total motorcycle sales increased by just 1.4% to 1.18 million units, according to the Federation of Thai Industries. In August, the sales volume fell by 1.1% to 130,283 units.
Last year, Thai Honda produced 1.57 million motorcycles at its plant in Bangkok’s Lad Krabang Industrial Estate, with 1.35 million units sold domestically and the remainder exported.
Mr Shimizu said the company is not concerned about the regional value content rule that requires manufacturers to use a certain amount of locally sourced materials for production to benefit from US reduced tariffs.
“Locally made materials currently account for 82-90% of our total motorcycle parts, meaning we support local products and employment,” he said.
The firm employs 8,620 workers, most of whom are Thai.