Rising tourism in Thailand to boost sluggish motorcycle market
Increased tourism activity later this year is anticipated to boost Thailand’s domestic motorcycle market, which has experienced sluggish sales in the first seven months of 2024, according to the Federation of Thai Industries (FTI).
Surapong Paisitpatanapong, Vice-Chairman of the FTI and spokesperson for its Automotive Industry Club, stated that the number of foreign tourist arrivals is on the rise and is expected to hit the target of 36.7 million this year. This influx is expected to drive up demand for motorcycles domestically, said Surapong.
“Tourism activities earlier this year have shown that many foreign tourists enjoy riding motorcycles when visiting the country, contributing to increased motorcycle production.”
He also emphasised that the motorcycle industry requires support measures to boost sales.
“We hope the new government will build confidence among entrepreneurs by launching new economic stimulus measures.”
Surapong mentioned that government initiatives to expedite budget spending for fiscal 2024 could further strengthen the economy, which has shown slow growth this year.
Domestic demand
In the first quarter of 2024, Thailand’s GDP growth was only 1.5%, increasing to 2.3% in the second quarter, as reported by the National Economic and Social Development Council.
This growth was mainly driven by tourism and domestic demand, although private consumption is expected to decelerate after a period of robust growth, according to Piti Disyatat, secretary of the Bank of Thailand’s Monetary Policy Committee (MPC).
The MPC projects that the Thai economy will continue to grow in the latter half of this year, with a growth rate of around 3% for the third quarter and 4% for the fourth quarter.
Despite the slowdown in the first seven months, the Automotive Industry Club has maintained Thailand’s motorcycle manufacturing target at 2.12 million units for 2024, said Surapong.
From January to July, total production decreased by 8.3% year-on-year to 1.37 million units, mirroring a 9.8% year-on-year decline in domestic sales to 1.03 million units.
Sales of internal combustion engine-powered motorcycles, accounting for over 99% of total sales, fell by 9.7% year-on-year. Electric motorcycle sales also saw a decline, dropping by 9% to 200 units during the first seven months of the year.
The decline in sales is partly attributed to stricter criteria by banks in granting auto loans amid high levels of household debt, according to the club.
Thailand’s motorcycle exports also faced a downturn between January and July. Export volume decreased by 10.1% year-on-year to 473,075 units, as neighbouring countries have increased their motorcycle production, reducing their reliance on imports from Thailand, reported Bangkok Post.
