Thailand 2020. Two-wheeler market lost 9.7%

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Thailand Motorcycles Market is struggling losing over 5% in the Q4 ending the 2020 with 1.5 million sales (-9.7%) ranking sixth at global level. The short term outlook is negative, impacting Honda, which dominates the market.

Economic Environment

Thai economy looks likely to have contracted at a slower pace in Q3 than in Q2, as the easing of coronavirus-induced lockdowns should have supported an uptick in domestic activity. However, ongoing travel restrictions affecting the all-important tourism sector, supply chain disruptions and weak foreign demand are likely to have weighed heavily on the external sector.

Turning to Q4, the panorama remains subdued: Business sentiment turned more pessimistic in October, and while the PMI signaled a marginal expansion in manufacturing conditions in the same month, firms reported a decline in exports, reflecting a still-weak external trading environment.

Two-wheelers market trend

The two-wheeler is the primary individual mobility industry in Thailand and one of the largest domestic manufacturing industry, considering the localization of several plants, based in the country to feed all ASEAN demand.

This market is the 6th largest world-wide albeit having lost volume in the 2020, when sales declined 9.7%.

The pandemic impact was lower than for other top countries with sales declined only 15.8% in the first half of the year, while the recovery was shy and following a Q3 up a mere 1.1%, in the Q4 sales declined again 5%, ending the year with 1.5 million sales (-9.7%) and with a short term outlook negative.

The category under more pressure is the motorbikes (-31%) while underbone/scooter segments were more resilient. In general the entry level of each category suffered less than the others.

Electric vehicles reported a massive growth (+93,2%), pushed up by government actions toward the development of a regional hub for this kind of vehicles and by the launch of several new models offered by local and Chinese brands.

Looking at the competitive landscape, as usual the market is dominated by Honda which in the 2020 sold 1.18 million two-wheeler (-9.7%) with not real competition from other traditional manufacturers.

The second player, Yamaha stands far behind with only 239.531 sales (-10.9%). In third place Piaggio with 28.105 units (+18.9%), followed by the local manufacturer GPX with 14.457 (-25.8%), Kawasaki with 12.155 (-13.4%) and Suzuki with 11.996 (-44.7%).

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Global Production Hub

Thailand is a major motorcycle manufacturing base ranking in 5th place as regard to the production capacity (2 million), after China (23 million units), India (20 million), Indonesia (8 million) and Vietnam (3 million).

Thailand started the 1st motorcycle manufacturing in 1967 under the CKD system.

At the beginning decade of 1990, Thailand promoted the investment of four-stroke engine motorcycle instead of the two-stroke one to reduce emission problem and the production boosted reaching a capacity of 1.75 million annual units. The sales of motorcycles followed the development of the country representing the first device of personal mobility.

In the following years, while introducing Free Trade Agreements (FTA) which caused the cancellation of industrial protection measure, the industry started to export and to evolve in line with the global demand, learning new technologies and adopting state of the art rules for safety and emissions.

Nowadays, there are 7 motorcycle manufacturers in Thailand with total capacity of production at 3 million units per year. They are Honda, Yamaha, Suzuki, Kawasaki, BMW, Triumph and Ducati. Most of them are located in the Central and East regions because they are clusters of manufacturer as well as near to the seaport for export those CBUs.