Thai cycle woes: Motorcycle sales hit brakes amid economic woes
Thailand’s motorcycle manufacturing and sales are experiencing a downturn this year, as the economy faces challenges from high household debt and weakened consumer purchasing power, according to the Federation of Thai Industries (FTI).
FTI Vice-Chairman and spokesperson for the federation’s Automotive Industry Club, Surapong Paisitpatanapong revealed that economic uncertainty has led to cautious spending among consumers, compounded by recent layoffs of 10,000 workers by various companies aiming to reduce operating costs.
Household debt levels have prompted banks to impose stricter criteria for car loans, impacting both car and motorcycle sales in Thailand, said Surapong.
“These problems, together with a delay in state budget spending earlier this year, dealt a blow to the economy.”
From January to April, Thailand’s Manufacturing Production Index averaged 98.2 points, reflecting a year-on-year decline of 2.06%. This drop is largely due to sluggish car manufacturing, high household debt, and elevated energy prices, as reported by the Office of Industrial Economics.
The protracted process of forming a coalition government in 2023 delayed budget allocation, with the House of Representatives approving the 3.4 trillion baht budget bill in March.
The Automotive Industry Club has decided not to adjust its motorcycle manufacturing target for the year, expressing confidence that the government will introduce new measures to stimulate economic activities, reported Bangkok Post.
Thailand is projected to produce 2.12 million motorcycles this year, with 1.7 million units intended for domestic sales and 420,000 units for export.
From January to May, total motorcycle manufacturing fell by 5.6% year-on-year to 1.01 million units. This includes 837,975 completely built-up units, a decrease of 8.9%, and 175,690 completely knocked-down units, which saw a 14.2% increase.
During the same five-month period, domestic motorcycle sales dropped by 9.1% year-on-year to 739,988 units, while motorcycle exports decreased by 5.5% year-on-year to 359,603 units, according to the club.
In similar news, domestic car sales are facing significant challenges as pure pickup sales dropped by 40.8% in the first five months of 2024, primarily due to a weak economy and difficulties in accessing loans, according to the Federation of Thai Industries (FTI).
