Decrease in Motorcycle Production and Sales anticipated for Second Half

Decrease in Motorcycle Production and Sales anticipated for Second Half

The motorcycle industry in Thailand is bracing for a potential slowdown in the second half of 2025, as a host of economic challenges loom large. These challenges, ranging from weak consumer purchasing power to tightening credit and high household debt, are causing concern for commercial banks and car financing companies.

According to the Federation of Thai Industries (FTI), the motorcycle industry is expected to experience sluggish growth due to weak consumer spending and household debt concerns. Despite a modest increase in motorcycle production and sales in the first five months of 2025, the industry is predicted to slow down. Banks and auto financing institutions have tightened their lending criteria because household debt remains high, at 16.3 trillion baht (87.4% of GDP) in Q1 2025, a slight decrease from the previous quarter but still a significant burden.

Another factor contributing to the anticipated slowdown is the decline in domestic consumption. New motorcycle registrations have dropped by 1.2% year-on-year and 7.0% month-on-month in May 2025. The Consumer Confidence Index fell to 54.2 in May, indicating growing consumer apprehension about the economic outlook.

The motorcycle industry is also feeling the impact of broader economic weakness and external pressures. Thailand's tourism sector has seen a sharp decline, with international arrivals down nearly 14%. This reduction in tourism activity and spending power is expected to further constrain discretionary spending on items like motorcycles. Additionally, global geopolitical tensions and trade uncertainties, such as US tariffs impacting exports, are expected to dampen economic growth to below 2% in 2025.

Motorcycle taxi drivers, a significant segment related to motorcycle usage, are facing rising fuel and living costs without corresponding fare increases. This reduces their incomes and indicates challenges within the informal transport sector related to motorcycles. Increased competition from online ride services and public transport also pressures this market segment.

In contrast, the sales of cars in Thailand have decreased by nearly 3% to 252,615 units, while the production of completely knocked-down motorcycles has increased by 13% year-on-year to 198,523 units. The production of completely built-up motorcycles has also increased by 3% year-on-year to 865,858 units.

Despite these challenges, the vice-president of the FTI's Automotive Industry Club, Surapong Paisitpatanapong, has warned motorcycle manufacturers not to be complacent. The political situation in Thailand is a cause for concern for commercial banks and car financing companies, with business confidence and public trust in the government reportedly going down, driven by political turbulence. A leaked audio clip featuring Prime Minister Paetongtarn Shinawatra and former Cambodian prime minister Hun Sen discussing a territorial dispute has affected the stability of the government, adding to the overall economic uncertainty.

In summary, the motorcycle industry in Thailand during the second half of 2025 faces slowing sales and production growth due to weak consumer demand, tightening credit, high household debt, declining motorcycle registrations, and broader economic headwinds including a fall in tourism and increasing competition in the transportation sector. These factors collectively present significant economic challenges for the sector going forward.

[1] Federation of Thai Industries. (2025). Motorcycle Industry Report Q1 2025. [2] Bank of Thailand. (2025). Consumer Confidence Index Report May 2025. [3] Tourism Authority of Thailand. (2025). International Arrivals Report Q1 2025. [4] FTI's Automotive Industry Club. (2025). Motorcycle Industry Outlook 2025.

1. The motorcycle industry in Thailand is projected to slow down in the second half of 2025, with concerns over weak consumer spending and high household debt causing worries for commercial banks and car financing companies, according to the Federation of Thai Industries (FTI).
2. In the first five months of 2025, there was a modest increase in motorcycle production and sales; however, tightened lending criteria from banks and auto financing institutions due to high household debt remains a significant challenge.
3. The decline in domestic consumption, as indicated by a drop in new motorcycle registrations and a falling Consumer Confidence Index, is another factor contributing to the anticipated slowdown in the motorcycle industry.
4. The industry is also feeling the impact of broader economic weakness and external pressures, such as a decline in Thailand's tourism sector and global geopolitical tensions, which are expected to dampen economic growth to below 2% in 2025.
5. Motorcycle taxi drivers, a significant segment related to motorcycle usage, are facing challenges like rising fuel and living costs without fare increases, increased competition from online ride services, and public transport, adding to the overall economic uncertainty in the motorcycle industry, influenced by factors such as policy-and-legislation, personal-finance, debt-management, politics, general-news, and transportation within the industry.

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