Thailand’s motorcycle industry is experiencing a downturn this year as a result of economic struggles, influenced by high household debt levels and subdued consumer spending power, as reported by the Federation of Thai Industries (FTI).
Concerns over the uncertain economic outlook have led individuals to adopt a cautious approach towards expenditures. Additionally, companies have resorted to laying off around 10,000 employees in a bid to manage operational costs, highlighted Surapong Paisitpatanapong, Vice-Chairman of the FTI and spokesperson for the federation’s Automotive Industry Club.
The tightening of car loan requirements by banks due to high household debt has had a direct impact on vehicle sales, including motorcycles, within the country.
The Office of Industrial Economics noted a year-on-year decline of 2.06% in Thailand’s Manufacturing Production Index for the initial four months of the year, largely attributed to sluggish car production amidst prevailing high household debt and increased energy costs.
The delays in state budget expenditure stemming from the extended process of forming a coalition government in 2023 further compounded economic challenges, with the approval of the 3.4-trillion-baht budget bill by the House of Representatives in March this year.
Despite the prevailing constraints, the Automotive Industry Club does not intend to revise its motorcycle manufacturing targets for the year, anticipating forthcoming government initiatives to stimulate economic activities.
Thailand is projected to manufacture 2.12 million motorcycles in 2024, with 1.7 million units designated for the domestic market and 420,000 units for export.
From January to May this year, total motorcycle manufacturing witnessed a 5.6% year-on-year decline to 1.01 million units, comprising 837,975 completely built-up units (an 8.9% decrease) and 175,690 completely knocked-down units (a 14.2% increase).
During this 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’s statistics.
