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18 Nov 2021


Thai motorcycle market remains stagnant with projected growth of merely 1% in 2021... electric motorcycles see expansion with entry of new operators though they may face difficulties (Current Issue No.3286)


        This year, Thailand’s motorcycle market has been seriously affected by the COVID-19 outbreak, diminishing consumers’ purchasing power. As the principal buyers, grassroots customers have been particularly affected. For the entirety of 2021, KResearch projects that total motorcycle sales may be  around 1.53 million units, or growth of merely 1 percent from the previous year. That said, two types of motorcycles have gone against the general market trend, namely big bikes with engine displacements of 251-400cc., and electric motorcycles. The latter, in particular, is an option that is now seeing a lot of interest among consumers, thanks to the government’s assistance scheme which has spurred investment volume, and cost of ownership that are relatively lower than those of petrol-driven motorcycles.
         However, the current electric motorcycle market is still dominated by new players which consist of energy businesses aiming to penetrate the electric motorcycle market, and profit from alternative sources of energy set to eventually replace the ever-declining oil supply – and newcomers including electric motorcycle manufacturers and those partnered with foreign investors. That said, such operators account for only a 0.2-percent share of the motorcycle market in Thailand at present. This can be attributed to two key weaknesses: high battery prices that keep motorcycle prices relatively high, undermining manufacturers’ efforts in reaching grassroot customers, the main buyers, like farmers and manual workers; and inconvenience of battery charging for drivers.
         Domestic operators should use this opportunity to expand their share of the electric motorcycle market sustainably over the long term, before mainstream motorcycle manufacturers enter the market in 2024. Hence, Thai motorcycle manufacturers may need to cooperate more closely with one another to develop a platform wherein electric motorcycle batteries can be shared – in turn enabling rapid and expansive development of batteries and battery swapping stations. This would easily lead to economies of scale, which would drive prices of electric motorcycles downward more quickly, while boosting consumer confidence in using the vehicles and further broadening the mass appeal of electric motorcycles in Thailand.