Motorbike Sales Set for a Slow Skid

A projected drop of around 7.68 percent across the board in motorcycle sales in Thailand for 2014 is likely to mean the total sales in the country will fall below two million units for the first time since 2011.

This was the prediction of Chiaki Kato, the president of AP Honda Co, the distributor of Honda motorbikes in Thailand. In 2011 sales of all motorbike makes exceeded two million for the first time, reaching 2.01 million. In 2012 they reached what has proved to be a peak, at 2.13 million, before falling to 2.004 million last year.

AP Honda has been the market leader in Thailand for the past 25 years and in 2013 achieved a whopping 74.5 percent of the total market. Ap Honda has around 540 dealers nationwide at present. Whatever affects Honda in significant measure will undoubtedly be reflected by the other motorbike manufacturers.

Mr Kato said he expected sales by all producers for the 2014 calendar year to come in at around 1.85 million units. The reasons are, of course economic, and tied to the ongoing political crisis which has created significant problems for some months now.

That said, the political impasse, which is unlikely to have been resolved completely by the planned 2 February general election, is very much a useful smokescreen for underlying economic data which is not favourable to growth in the motorcycle market.

The key factors, according to Mr Kato, is the inactive economic growth which came into play in 2013 and is set to continue through at least the first half of this year. Falling exports, the appreciation of the baht, the decline in prices for agricultural products and the concomitant reduction in purchasing power for the average consumer, have all been factors which will play into the bottom line sales numbers for motorbikes.

Mr Kato does think that motorbike sales will be better in the second half of the year, but did add the rider that, “ongoing political conflict may whittle down economic growth, leading motorcycle sales to fall accordingly,” he was quoted as saying.

Nonetheless, the Honda president says he is confident the sales figures will jump above two million units again in 2015 since projections suggest the Thai economy will grow at around four percent in that year.

Although AP Honda holds a substantial market lead, Mr Kato has unveiled a three-year strategic plan to try and maintain that dominance, including the introduction of 12 new models by 2016 and more than doubling its current number of dealerships to 1,200.

Around 90 percent of AP Honda’s motorbikes are produced by their factory in Samut Prakan, which has a capacity of 1.65 million units.