Local motorcycle sales are projected to grow 1% year-on-year to 1.7 million to 1.75 million units this year as buyers continue to face difficulties accessing auto loans, according to Thai Honda Company, a motorcycle manufacturer and distributor.
Commanding the largest market share in the domestic market, Thai Honda expects its sales to grow by 2% year-on-year to 1.36 million to1.4 million units in 2025, said president Yuichi Shimizu.
"Thailand will continue to face challenges this year, especially the high level of household debt that deals a blow to consumer purchasing power and raises concerns over non-performing loans [NPLs] in the car and motorcycle sectors," he said.
Household debt including informal loans has reached 104% of gross domestic product (GDP), according to a report recently released by the Joint Standing Committee for Commerce, Industry and Banking (JSCCIB).
The report, which indicates household debt-to-GDP ratio in the fourth quarter of last year, is based on a study conducted by Chulalongkorn University (CU), commissioned by the JSCCIB.
The high level of household debt causes banks and car financing companies to be more cautious about granting auto loans for fear of NPLs.
According to Thai Honda, domestic motorcycle sales decreased by 9% year-on-year to 1.71 million units in 2024 as a result of banks' strict lending criteria and weak consumer purchasing power.
The company also posted a drop in sales in 2024, which fell by 6% year-on-year to 1.38 million units amid unfavourable economic circumstances, said Mr Shimizu.
He is positive about the improving situation this year, hoping people's purchasing power will become stronger due to the government's stimulus measures, which are expected to help boost motorcycle demand.
Thai Honda will also draw more customers in Thailand and foreign markets by launching new motorcycle models.
The company uses Thailand as its export base, selling motorcycles from its factory here to 96 countries. It has a 21% market share in Europe, a 18% share in Japan and a 15% share in the United States.
In Thailand, Thai Honda has almost 1,300 dealers to help drive its motorcycle sales.
In 2025, family motorcycles are expected to maintain their popularity in Thailand, accounting for 55% of total sales, followed by 42% in the automatic segment, 2% in the sports segment with electric motorcycles making up just 1%.