BUSINESS FOCUS: CONSUMER CONFIDENCE
Bike sales a leading indicator
- Published: 30/11/2009 at 12:00 AM
- Newspaper section: Business
Motorcycle sales are always a good indicator of consumer confidence in Thailand, and signs of improvement are notable as incomes rise for farmers, an important core market, says Teerapat Chivapong, sales director of AP Honda, the country's largest motorcycle distributor.
A local bike shop displays a banner reading ‘‘Cheap motorcycles, low instalments’’ to attract customers. Motorcycles sales in the North and Northeast improved noticeably in recent months due to healthier paddy prices, but those in the South remained poor as rubber prices and tourism, the main sources of income in the area, were yet to recover.
Around 70% of bike consumers are those in rural communities.
Moreover, the economy is steadily recovering as government stimulus spending begins bearing fruit, with an expected positive knock-in impact on people in other sectors.
The industry earlier forecast that motorcycle sales this year would drop to 1.35 million units because of the impact of the global economic downturn, local political tensions and high fuel prices.
The target was recently revised up to 1.47 million units after factors began turning positive for the market. However, it remains 13.6% below the actual sales of 1.7 million units in 2008.
Mr Teerapat said the sales improvement was seen in mid-October and November. Sales in the first 10 months were still down by 14% year-on-year but the contraction was the smallest so far this year.
Sales in the North and Northeast improved noticeably in recent months due to healthier paddy prices, but those in the South remained poor as rubber prices and tourism, the main sources of income in the area, were yet to recover, said Mr Teerapat.
At the other end of the income scale, luxury car sales are picking up also.
"The economy is becoming better now as we hear from our clients, who have the sentiment to spend more freely," said Peerasut Tantiyankul, managing director of Eton Imports Co, a major independent premium car importer.
The state of the economy generally does not affect consumers in the luxury car segment very much but their spending sentiment does ebb if the economy goes bad.
