The prevailing economic slowdown, plagued with persistently high oil prices and domestic political uncertainties, has dealt a blow to the industrial sector and automotive market at home, alike. This is particularly true for the automobile market that has decelerated remarkably, as evidenced from car sales volume that dropped by 2.9 percent during the first seven months of 2006, year-on-year. Likewise, the domestic motorcycle market also felt the pinch. Still, this market is apparently somewhat resilient to the economic volatility, to a certain degree, though it was earlier predicted that the market might be saturating. During the first seven months of this year, the domestic sales volume of motorcycles grew 4.7 percent, over-year, close to the full-year growth of 4.2 percent in 2005. In the midst of the economic slowdown caused by rising oil prices that have been seen for some time now, the negative effects on the automotive market seem to be more pronounced than on the motorcycle business. This is because motorcycles are priced cheaper and consume less energy than larger vehicles. As a consequence, the motorcycle market can cope, somewhat, with the oil crisis and lackluster economy. KASIKORN RESEARCH CENTER (KResearch) expects that motorcycle sales in 2006 are likely to grow slightly less than last year, at around 2.5-3.0 percent, totaling some 2.17 million units against the 2.11 million units in 2005.
The fact that automatic transmission motorcycles have gained greater popularity with consumers has much contributed to the active motorcycle business at home. In 2006, the preference for motorcycles with automatics was seen rising considerably, with a sales volume of 427,768 units between January and July of this year. This represents an increase of nearly 246 percent, or 3.46 times higher than the corresponding period of last year. The figure made up as much as 33.8 percent of total motorcycle sales. Under these circumstances, several motorcycle manufacturers have shifted toward increased production of motorcycles with automatic transmissions to satisfy the higher market demand. In KResearch's view, if this trend persists, the market share of motorcycles with automatics will increase to 50-60 percent of the domestic overall sales of motorcycles in the year to come. If so, they will rank No.1, eclipsing ‘family' models with manual transmissions that have recorded the highest sales proportion for several years now.
On the export front, bright prospects seem to lie ahead for motorcycles. During the past one or two years, when the motorcycle market at home was seemingly becoming saturated, their exports enjoyed a rising growth to top one million units, reaching 1.337 million units, worth more than THB22.768 billion, in 2005. During the first seven months of this year, the export volume of motorcycles totaled 893,793 units, a year-on-year increase of 15.7 percent.
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