FTI Maintains 2024 Motorcycle Manufacturing Forecast Amid Economic Challenges
PUBLISHED: 2 Aug 2024 at 05:48
Thailand’s motorcycle manufacturing sector is expected to experience a slowdown in the latter half of this year, driven by high household debt levels and a struggling economy, according to recent insights from the Federation of Thai Industries (FTI).
Despite the challenging economic climate, the FTI remains steadfast in its manufacturing target for 2024. Surapong Paisitpatanapong, vice-chairman and spokesman for the FTI’s Automotive Industry Club, expressed that a notable increase in overall motorcycle production is unlikely under current circumstances.
“Rising household debt is impacting consumer purchasing power and fostering a cautious spending environment amidst economic uncertainty,” he stated.
Currently, the household debt-to-GDP ratio stands at 91%, compelling financial institutions to implement stricter lending practices for auto loans due to concerns over rising non-performing loans.
The FTI projected total motorcycle production for 2024 to reach 2.12 million units, buoyed by anticipated growth in domestic demand and international purchase orders. Of this total, approximately 1.7 million units are expected for domestic use, with around 420,000 units earmarked for export.
However, the motorcycle industry is facing headwinds, highlighted by a 13% year-on-year dip in production during the first half of the year, totaling 1.19 million units. This includes an 11.8% decrease in completely-built up (CBU) motorcycles and an 18.4% fall in completely-knocked down (CKD) motorcycles.
In June, motorcycle manufacturing dropped significantly by 25.7% year-on-year, totaling just 183,528 units.
While domestic sales saw a slight increase of 8.9% year-on-year in June, the overall sales for the first six months fell by 10.3% compared to the same period last year, totaling 890,534 units.
The export landscape for motorcycles also reflects challenges, with a 3.1% year-on-year decline in unit exports during the first half of the year, generating 32.7 billion baht—a reduction of 8.7% year-on-year. In June alone, exports fell by 3% compared to the previous year.
According to Surapong, weak domestic car sales have led to a downward revision of the car manufacturing target for 2024, which is now set at 1.7 million units, down from an initial estimate of 1.9 million. Similar to motorcycle manufacturers, car makers are grappling with the ongoing slowdown in the automotive sector.
