Thai Honda Co, a company involved in the production and distribution of motorcycles, anticipates a slight decrease in domestic sales this year, with an estimated range of 1.7-1.75 million units, owing to regulatory changes implemented to manage high household debt levels.
In the previous year, motorcycle sales in Thailand reached a total of 1.88 million units.
Shigeto Kimura, president of Thai Honda, expressed his expectation that the impact of these regulations will diminish in the long run.
It is projected that Honda motorcycle sales will amount to 1.3-1.35 million units in the current year, a decline from the 1.47 million units recorded in 2023.
The regulations, co-drafted by the Bank of Thailand and the Fiscal Policy Office, involve the oversight of auto hire-purchase and vehicle leasing, which became effective on November 1, 2023. The aim is to uphold the country’s financial stability by maintaining household debt at an appropriate level and preventing consumers from becoming excessively indebted. Notably, household debt was estimated to exceed 90% of GDP last year.
Factors affecting sales in 2024 include the revival of tourism and the government’s initiative to increase foreign arrivals through a visa-free scheme, as highlighted by Mr. Kimura. Although higher crop prices are expected to bolster farmers’ earnings, this is not anticipated to significantly boost motorcycle sales.
Thai Honda noted that, among the country’s overall motorcycle sales, the automatic category accounted for 49% of the market share last year, followed by the family category (47%), sports (3%), and battery-operated motorcycles (1%).
Mr. Kimura attributed Thai Honda’s sales performance in the previous year to the launch of the new model Giorno Plus. Acknowledging the decline in domestic car sales, particularly in the pure pickup segment, due to stricter loan criteria imposed by banks to mitigate non-performing loans, Mr. Kimura expressed confidence that such a sales decline is improbable for motorcycles, considering their status as essential products. Additionally, he anticipated that lenders would compete by offering attractive packages.
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