Thailand's motorcycle industry outlook this year is expected to remain unchanged from the situation in 2024, in which both manufacturers and buyers struggled to deal with the impact of high levels of household debt, says the Federation of Thai Industries (FTI).
The debt problem is blamed for causing banks and financing companies to tighten lending criteria in the automotive sector, leading to a drop in domestic sales of motorcycles.
Buyers who managed to buy motorcycles cannot pay back the money due to their financial problems during this period of slow economic growth.
From January to November 2024, motorcycle sales in the country fell by 9.63% year-on-year to 1.55 million units, according to the FTI.
The federation will report the December sales and evaluate the 2024 motorcycle situation later this month.
It will also monitor motorcycle repossessions, which increased significantly in 2024.
"The motorcycle market will not become healthier this year as long as bankers remain cautious about granting loans and more companies in the automotive industry decide to lay off workers due to unpleasant economic circumstances," said Surapong Paisitpatanapong, vice-chairman of the FTI and the federation's Automotive Industry Club.
Employment in the automotive and auto parts industries, as well as car financing services, is declining as domestic car sales have been sluggish for months, the Employers' Confederation of Thai Trade and Industry said earlier.
These businesses have gradually laid off workers, which will lead to higher unemployment rates, said the confederation.
Despite the drop in motorcycle sales that led to a decrease in manufacturing over the 11-month period in 2024, Thailand could achieve the production target of 2.12 million units.
From January to November, motor- cycle production decreased slightly by 2.1% year-on-year to 2.22 million units, which is higher than the target, according to the club.
The 2.22 million units comprise 1.73 million units of completely built-up motorcycles, a year-on-year decrease of 11.3% from the corresponding period in 2024, and 490,247 units of completely knocked-down motorcycles, a year-on-year increase of 55.3%.
Tourism and exports are the main factors that drove manufacturing, said Mr Surapong.
From January to November 2024, motorcycle exports increased by 14.9% year-on-year to 857,587 units despite an economic slowdown in some overseas markets such as Indonesia.
In October 2024 alone, exports skyrocketed 157% year-on-year to 175,066 units, up from 68,136 units.
Many countries, especially in Asia, bought more completely knocked-down units for reassembly as sellers wanted new motorcycle models to serve customers, according to Mr Surapong.
