Due to low demand and high household indebtedness, Thai motorcycle production is expected to fall to 2.1 million in 2025.
Thai motorcycle production is expected to fall to 2.1 million units in 2025 due to low demand, high household debt, and tight credit policies.
Motorcycle production in Thailand will likely remain low in 2025, reaching 2.1 million units. The Federation of Thai Industries (FTI) announced this forecast, attributing it to buyers’ continued difficulties obtaining credit in the domestic market. The difficult economic situation and high household debt levels continue negatively impacting sales.
In 2024, the country’s motorcycle production fell 1.8% year-on-year to 2.42 million units. Production of fully assembled motorcycles fell 11% to 1.88 million units, while production of assembly kits, on the other hand, rose 53.1% to 539,159 units. Last December alone, production fell 6.5% year-on-year to 202,614 units in December 2023.
The forecast for 2025 correlates with GDP projections. However, stringent lending criteria by banks and auto finance companies, coupled with high household debt levels, will continue to drive the motorcycle market this year.
“With higher GDP growth expected by the government, we hope to meet the motorcycle production target,” said Surapong Paisitpatanapong, vice chairman of FTI and spokesperson of the Automotive Industry Club.
Of the planned 2.1 million motorcycles, 1.7 million are for the domestic market, and 400,000 are for export. The Office of Fiscal Policy forecasts the economy to grow to 3.5 percent this year, up from an estimated 2.5 percent growth last year.
“Government stimulus measures and tourism growth should boost consumers’ purchasing power and confidence in the economy,” Mr. Surapong said. He said improving purchasing power is crucial to boost demand for motorcycles, which was weak last year due to slow economic growth and high household debt levels.
In December, domestic motorcycle sales fell 5.7 percent year-on-year to 124,793 units. For the full year 2024, sales fell 9.35 percent year-on-year to 1.68 million units in 2023. Sales of internal combustion engine motorcycles were down 9.3%, and sales of battery-powered motorcycles were down 52.3%. Last year, only 200 electric motorcycles were sold, according to the club.
Despite the difficult situation in the domestic market, motorcycle exports showed a positive trend last year. According to Mr. Surapong, exports rose 14.1% year-on-year to 938,762 units. However, the value of exports fell 6.7% to 63.9 billion baht.
Thus, despite the positive export performance, the Thai motorcycle industry faces serious challenges in the domestic market. High household debt levels and banks’ cautious lending policies continue to restrain demand, which hurts output. It is hoped that projected economic growth and government stimulus measures can revitalize the market and restore consumer confidence.
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