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20 Jan 2006

Industry

Thai Motorcycles, 2006: Saturated Market at Home, High Export Potential

คะแนนเฉลี่ย

In 2005, the domestic motorcycle market saw volatility as a result of the economic slowdown in Thailand, violence in the South and skyrocketing oil prices that dealt a severe blow to the automotive industry and market (both automobiles and motorcycles). Domestically, the motorcycle market is nearing saturation, resulting in sluggishness in motorcycle sales in 2005. This was particularly true for the first half of last year when the government announced floatation of retail diesel prices after controlling prices for several years. Meanwhile, gasoline prices soared steadily. However, the market picked up in the latter half, in particular, at the end of the third quarter into the beginning of the fourth quarter. As a result, the motorcycle market throughout 2005 is expected to have grown some 4.0 percent, with a sales volume of some 2.11 million units, down from the growth rates of 14.7 percent and 33.1 percent in 2004 and 2003, respectively.

In 2006, the motorcycle market at home is expected to exhibit moderate growth due to economic uncertainties, high oil prices and rising interest rates. Worse still, the motorcycle market itself is nearing the saturation point. As far as estimates go, the market is expected to grow only 3 percent with a sales volume throughout the year totaling some 2.2 million units.

While the domestic market for motorcycles is reaching saturation, exports are growing. Motorcycle manufacturers have foreseen the potential of expansion into foreign markets, particularly to ASEAN, helping the export value of Thai motorcycles and parts to grow respectively. It is projected that, for the entire 2005, the export value will have risen to USD670 million, and this healthy export growth will carry on into 2006 with growth of around 30-35 percent. This will send the export value of Thai motorcycles and parts in 2006 upward to around USD900 million.

At present, the competition in the domestic motorcycle market is rather high, as the various motorcycle camps are trying to use marketing strategies to maintain their market shares, or take that of others. The largest manufacturers in the market, at present, are from Japan, which together account more than 90 percent of all domestic sales. However, other motorcycle manufacturers/distributors of both Thai and foreign entrepreneurs, including neighboring Malaysia and China, are all trying to increase their market share in Thailand. At present, many entrepreneurs in the motorcycle industry view that the Thai domestic market is nearing the saturation point, after having grown for many decades, until now the ratio of motorcycles to the total populace has reached one unit/3-4 persons, numbering around 16 million motorcycles being used on roads across the country. However, the decelerating motorcycle market, coupled with the saturation has stimulated entrepreneurs toward expanding into export markets. This means that the production of motorcycles and parts for export will become more important, with time. Evidently, in the last 4 years, the export value of Thai motorcycles and parts increased clearly and steadily, from a total value of USD246.9 million in 2001, to USD512.8 million in 2004, more than a doubling of exports within only 3 years. In the first 11 months of 2005, the export value rose to USD609.3 million, growing more than 30.6 percent over the same period of the preceding year.

Industry