Thai Yamaha Motor Co, the local unit of the Japanese motorcycle maker, forecasts the new excise tax structure for motorcycles will increase retail prices in all segments, but believes buyers will not be affected.
The Excise Department has yet to make a decision on the new excise tax structure for motorcycles, but the calculation should be on par with the car tax, recalibrated from engine sizes (cubic centimetres) to CO2 emissions, effective from early 2016.
The department plans to give motorcycle manufacturers a one-year grace period to prepare themselves for the new tax structure before it is enforced, said director-general Krisada Chinavicharana.
The new tax rate means motorcycles sold in Thailand with higher CO2 emissions will be subject to higher tax rates and retail prices. Larger engines typically release more emissions.
Phongstorn Ermongkonchai, Yamaha's chief of commercial operations, said it projects the effective period for the new tax coming sometime in 2019, with the government designing the new structure after receiving feedback from manufacturers and distributors.
"Yamaha is confident the new retail prices will not greatly affect buyers because the mass market is for 125cc motorcycles, which only release 0.5 grammes of CO2 per kilometre," he said. "Manufacturers and distributors cannot avoid the new tax's pressure on retail prices, and they'll have to develop motorcycles to comply with the Euro 4 emission standards, which is a global requirement."
Separately, Yamaha reported its sales performance in the first half rose slightly by 1.3% to 141,842 units, while the overall motorcycle market in the same period remained in the red with 934,547 units sold, down by 1.8%.
Mr Phongstorn said two Yamaha's segments -- automatic and small motorcycles -- performed very well, with 85,274 and 28,056 units sold during January to June, up by 6% and 17.8%, respectively.
But its sport motorcycle segment dropped sharply by 20.2% to 28,512 units. Of those, 1,006 were Yamaha's big bikes above 400 cc.
As a result of the market contraction, Yamaha revised down its sales prospects in 2018 from 320,000 earlier to 305,000 motorcycles sold, which is still 13.8% more year-on-year.
"Our target has to be in line with overall market sentiment and Yamaha's motorcycle stock for its dealers," said Mr Phongstorn.
"In 2018, the market will stand at 1.83 million motorcycles, up slightly by 1% and Yamaha has an optimistic outlook in the second half, better than the first one."
In a related development, Yamaha launched its first hybrid motorcycle, the Grand Filano Hybrid, in Thailand -- the first market in Southeast Asia.
Vietnam is set to be the second market for the motorcycle.
Mr Phongstorn said the hybrid version has been designed for each market, not globally.
The local prices are set at 55,500 and 62,000 baht, with gasoline and electric platforms available.
Yamaha is ranked second in the Thai market while Honda, which controls a 77% market share, will launch its own hybrid motorcycle on Wednesday -- the PCX Hybrid.