Honda turns to big bikes to drive sales in tough market
Tokyo: With Thailand's motorcycle market about to become saturated, AP Honda, local distributor of the Japanese motorcycles, is refocusing its business on big bikes and product design that matches potential buyers' demand.
"Bike ownership in Thailand is on a par with that in developed markets such as Taiwan and Japan," said president Nobuhide Nagata. "The market outlook for motorcycles is thus tough, as the room for market growth is getting limited."
In Thailand, motorcycle ownership averaged one for every three people in 2013, down from one for every 2.6 people in 2012. In Taiwan, one in every 2.1 people has a motorbike.
Thailand's annual motorcycle market sales reached 2 million for the first time in 2011 when sales amounted to 2.01 million. Sales rose to 2.13 million in 2012 before shrinking by 5.92% to 2.004 million last year.
AP Honda forecasts overall Thai motorcycle sales will fall by 12.7% this year to 1.75 million. It had previously projected sales of 1.85 million.
Mr Nagata said the economy was the key factor affecting motorcycle sales. He said economic prospects looked cloudy because of high personal debts, leading people to tighten their belts.
However, he believes the sport and big-bike segment remains promising.
"Sport motorcycles and big bikes are the key trend in the Thai market because of their value," he said. "Manual and automatic motorcycles may still be good for new buyers."
Suchart Arunsaengroj, director of AP Honda, said last month that big bikes with an engine size exceeding 500cc would continue to thrive this year despite an overall fall in motorcycle and automotive sales.
He forecast overall Thai sales of about 15,000 big bikes this year, up from 13,000 in 2013.
AP Honda recently raised its 2014 sales target for big bikes from 4,000 to 5,000, an increase of 66.7% from 3,000 sold last year.
AP Honda expects to sell 1.4 million motorcycles this year, down 6.23% from 1.49 million in 2013.
Its sales over the first half fell by 13.7% to 699,073 units, while the overall market stood at 877,746 motorcycles, down 20.1%.
Thailand's big-bike sector is expected to thrive over the next few years, particularly due to the Japan-Thailand Economic Partnership Agreement that calls for cutting the 30% import tariff on big bikes.