Motorcycle Output and Sales to Decline in Second Half

Rising Motorcycle Production in Thailand, but Challenges Loom

Thailand’s motorcycle industry has seen a surge in production and sales during the first five months of 2025, yet this growth does not necessarily signal a bright future for the sector. According to the Federation of Thai Industries (FTI), the industry is expected to face a slowdown in the second half of the year due to various economic challenges.

Surapong Paisitpatanapong, vice-president of the FTI and spokesperson for its Automotive Industry Club, highlighted that weak consumer purchasing power and sluggish economies among Thailand’s trading partners are contributing to the anticipated downturn. Despite the positive figures, manufacturers must remain cautious as external and domestic factors continue to pose risks.

Production and Sales Growth

From January to May, Thailand’s total motorcycle manufacturing increased by 5%, reaching over 1 million units. This includes 865,858 completely built-up units, which saw a year-on-year increase of 3%, and 198,523 completely knocked-down units, representing a 13% rise compared to the same period last year.

Domestic sales also showed improvement, with 751,848 motorcycles sold during the period—a 1.6% increase from the previous year. Although these numbers outperformed car sales, which declined by nearly 3% to 252,615 units, the motorcycle industry cannot afford to be complacent.

Economic Pressures and Financial Constraints

One major concern for the industry is the tightening of lending criteria by banks and car financing companies. High levels of household debt have led financial institutions to adopt more stringent standards when approving auto loans.

According to the Bank of Thailand’s report released on June 30, total household debt reached 16.3 trillion baht in the first quarter of 2025, equivalent to 87.4% of GDP. This marks a slight decrease from 16.4 trillion baht or 88.4% of GDP in the previous quarter. The decline is attributed to stricter lending practices and weaker loan demand from borrowers. However, despite the reduction, household debt remains at a high level, indicating ongoing financial strain on consumers.

Political Uncertainty and Business Confidence

The sluggish domestic economy is not the only issue affecting the motorcycle industry. Political instability is also causing concern among commercial banks and financing companies. Surapong noted that business confidence and public trust in the government are declining due to political turbulence.

A recent incident involving leaked audio clips featuring Prime Minister Paetongtarn Shinawatra and former Cambodian Prime Minister Hun Sen discussing a territorial dispute has further undermined government stability. This controversy has led to a petition being submitted to the Constitutional Court by a group of senators seeking to remove the prime minister from her position.

Outlook for the Sector

While the motorcycle industry has experienced growth in the first half of 2025, the outlook for the remainder of the year remains uncertain. Factors such as high household debt, political instability, and weak consumer demand could all contribute to a slowdown in the sector. Manufacturers will need to navigate these challenges carefully to maintain their market positions and ensure long-term sustainability.

As the industry continues to adapt to changing economic conditions, it remains to be seen how effectively it can respond to the pressures ahead. For now, the focus will be on maintaining momentum while preparing for potential headwinds in the coming months.