A more active tourism sector later this year is expected to lift the domestic motorcycle market, which struggled with sluggish sales during the first seven months of 2024, says the Federation of Thai Industries (FTI).
The number of foreign tourist arrivals continues to increase and should reach the target of 36.7 million this year, which will drive up motorcycle demand in the country, said Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for its Automotive Industry Club.
He said earlier tourism activities are one factor that increases motorcycle production, as many foreign tourists enjoy riding a motorcycle when visiting the country.
However, the motorcycle industry also needs support measures to increase sales, said Mr Surapong.
"We hope the new government will build confidence among entrepreneurs by launching new economic stimulus measures," he said.
Mr Surapong said government efforts to speed up budget spending for fiscal 2024 is another factor that could bolster the economy, which has recorded slow growth this year.
In the first quarter of 2024, Thai GDP growth was only 1.5%, rising to 2.3% in the second quarter, according to the National Economic and Social Development Council.
This growth was primarily driven by tourism and domestic demand, though private consumption is expected to slow after a period of strong growth, according to Piti Disyatat, secretary of the Bank of Thailand's Monetary Policy Committee (MPC).
The MPC expects the Thai economy to continue growing in the second half of this year, with a growth rate of around 3% projected for the third quarter and 4% in the fourth quarter.
With improved economic prospects, the Automotive Industry Club maintained Thailand's motorcycle manufacturing target at 2.12 million units for 2024 despite a slowdown in the first seven months, said Mr Surapong.
From January to July, total production decreased by 8.3% year-on-year to 1.37 million units, in line with the 9.8% year-on-year drop in domestic sales to 1.03 million units.
Domestic sales of internal combustion engine-powered motorcycles, which comprised more than 99% of total sales, decreased by 9.7% year-on-year, while electric motorcycle sales fell by 9% to 200 units during the first seven months of the year.
The club partly attributed the decrease to banks' stricter criteria in granting auto loans amid the high level of household debt.
Thailand's motorcycle exports also declined between January and July.
Export volume decreased by 10.1% year-on-year to 473,075 units as neighbouring countries are producing motorcycles, replacing imports from Thailand.