Thai Honda Co, a manufacturer and distributor of motorcycles, expects domestic sales to dip slightly this year to 1.7-1.75 million units because of rule changes enforced to control high household debt.
Last year sales of motorcycles in Thailand totalled 1.88 million units.
"The impact of the measure is expected to ease over the long term," said Shigeto Kimura, president of Thai Honda.
Sales of Honda motorcycles are estimated at 1.3-1.35 million units this year, down from 1.47 million units in 2023.
The measure, jointly drafted by the Bank of Thailand and the Fiscal Policy Office, ensures supervision of auto hire-purchase and the leasing of cars and motorcycles. It took effect on Nov 1, 2023.
The measure aims to maintain the country's financial stability by keeping household debt at an appropriate level and preventing consumers from becoming overburdened. Household debt was estimated at more than 90% of GDP last year.
Sales factors for 2024 include the tourism recovery and the government's visa-free scheme to increase foreign arrivals, said Mr Kimura.
Higher crop prices should increase farmers' income, but this is not expected to increase sales of motorcycles considerably, he said.
The company said of the country's total motorcycle sales, the automatic category tallied a 49% market share last year, followed by the family category (47%), sports (3%) and battery-run motorcycles (1%).
Mr Kimura said Thai Honda's sales last year were driven by the launch of new model Giorno Plus.
He acknowledged declining domestic car sales, especially in the pure pickup segment, as banks used stricter loan criteria to limit non-performing loans. Mr Kimura said he does not expect a similar sales downturn for motorcycles because they are deemed necessary products and lenders are likely to compete by offering attractive packages.