Thai Honda forecast mild ‘declinecycle’ in domestic sales this year

Thai Honda Co, a leading motorcycle manufacturer and distributor, predicts a mild decline in domestic sales to around 1.7-1.75 million units this year. This anticipated dip is attributed to the newly implemented regulations aimed at managing high levels of household debt.

In the previous year, Thailand recorded total motorcycle sales of 1.88 million units. For the coming year, sales of Honda motorcycles are projected to range between 1.3-1.35 million units, a noticeable reduction from the 1.47 million units sold in 2023.

Shigeto Kimura, Thai Honda President, expressed optimism about the long-term effects of the new measure. The regulation, a collaboration between the Bank of Thailand and the Fiscal Policy Office, came into force on November 1 last year. It intends to oversee the hire-purchase and leasing of cars and motorcycles, aiming to maintain financial stability in the country by keeping household debt at a manageable level. Last year, household debt was reportedly over 90% of the GDP.

Factors that could influence motorcycle sales in 2024 include the recovery of tourism and the government’s visa-free scheme to boost foreign arrivals, according to Kimura. While higher crop prices may increase farmers’ income, Kimura does not anticipate a significant surge in motorcycle sales as a result.

Thai Honda revealed that in last year’s total motorcycle sales, the automatic category held a market share of 49%, followed closely by the family category at 47%. Sports and battery-run motorcycles accounted for 3% and 1% respectively, reported Bangkok Post.

Last year, Thai Honda’s sales were buoyed by the introduction of the new model, Giorno Plus. While acknowledging the slump in domestic car sales, particularly in the pure pickup segment due to stricter loan criteria by banks, Kimura does not foresee a similar downtrend in motorcycle sales. He explained that motorcycles are viewed as essential products and it is likely that lenders will compete by proposing attractive packages.