Japanese motorcycle maker Honda plans to cut production at its Samut Prakan factory by 2-3% this year from 1.39 million units planned earlier in keeping with lower domestic sales.
Suchart Arunsaengroj, director of Thailand's AP Honda Co, said the cut was aimed at striking a balance between demand and supply.
"We've cut our 2015 sales target to 1.32 million because overall automotive and motorcycle sales remain tepid due to the weak economic outlook and low farm prices," he said.
The cut comes despite AP Honda posting a 6.36% increase in first-half sales to 744,423 motorcycles, according to the Land Transport Department.
AP Honda had sales of 1.36 million motorcycles in 2014, down from 1.49 million in 2013, 1.48 million in 2012 and 1.35 million in 2011.
Thai Honda Manufacturing Co, AP Honda's affiliate firm in Samut Prakan, has annual production capacity of 1.65 million motorcycles.
AP Honda projects domestic motorcycle sales will reach 1.66 to 1.68 million this year, down from an earlier projection of 1.75 million, marking a third straight year of contraction.
In 2011, motorcycle sales hit 2.01 million for the first time. Sales rose to 2.13 million in 2012 before dropping to 2 million in 2013 and to 1.7 million last year.
Mr Suchart said on top of the poor economic outlook and low farm prices, the drought had emerged as an additional risk to the motorcycle market.
"Unlike from 2011-12, when sales rose to 2 million motorcycles a year, the market right now has no new impetus such as a nationwide wage hike," he said. "The Thai market will be saturated soon, like Japan or Taiwan."
Mr Suchart said the company would rather pin high hopes on sales of big bikes with engine sizes of more than 400cc.
AP Honda forecasts domestic big-bike sales to rise by 20% this year to 19,000, with Honda making 6,600. In the first half, big-bike sales increased by 26% to 9,796.