Harley-Davidson has decided to set up its regional manufacturing base in Thailand and the news has left Col Polsak Sripen, and many other local fans of the iconic US motorcycle brand, ecstatic.
The director of the Harley Owners Group Thailand Chapter, representing the most passionate local Harley riders, hopes that the production facility will make Harley-Davidson stronger and more competitive in the Thai market, where many global motorbike makers have established plants.
"In terms of prices, Harley-Davidson is hard-pressed to compete with [other] imported motorcycles now," Col Polsak said. "Having the production facility here will help build up Harley-Davidson's sales not only in Thailand, but also in the region."
The big-bike market in Thailand has grown significantly over the past five years. In 2012, the big-bike market -- 400cc and above -- rose sharply by 130% to 6,278 units and climbed by 114% to 13,430 motorcycles in 2013.
The market grew at a slower pace of 24.4% to 16,712 units in 2014 and 21.7% to 20,336 units in 2015.
Last year, the 24,880 units of big bikes were sold in Thailand, up 22.3% from a year before.
According to Katie Whitmore, public relations manager of Harley-Davidson, the new plant in Rayong will utilise the same standard as Harley-Davidson's completely knocked-down (CKD) facilities in Brazil and India to produce motorcycles from components produced at and shipped from its US facilities and other supply bases.
Ms Whitmore declined to disclose the company's investment budget and production capacity at the Rayong plant, which is scheduled to start running in late 2018.
She said construction of the new manufacturing facility in Thailand would support Harley-Davidson's long-term strategy of building the next generation of riders globally.
"Harley-Davidson intends to grow its international business to 50% of an annual volume by 2027," she said.
According to the company's report, Harley-Davidson had worldwide sales of 260,289 motorcycles in 2016, down 1.6% from 264,627 in 2015, which itself was also 1.3% lower than the previous year.
Of the 2016 volume, its international business represented 37.9% or 98,631 motorcycles, up 2.3%. However, the sales in the US fell 3.9% to 161,658 units.
In Asia-Pacific, Harley-Davidson sold 32,889 motorcycles, up 2%.
"To meet that growth objective, we are expanding our presence in the Asia-Pacific market by building the assembly facility in Thailand for the local Asean market and China," Ms Whitmore said, adding that the company's focus is on being close to its customers to drive the growth in more markets globally.
"The new facility will allow Harley-Davidson to be more responsive and competitive in the Asean region and China," she said.
A model stands next to Honda's Rebel motorcycle at a motor show. TAWATCHAI KEMGUMNERD
At present, an import duty of 60% is levied on foreign motorcycles in Thailand, except those shipped in from Japan.
With the local facility, Harley-Davidson can take advantage of tax breaks for its shipment to Asean countries under the regional free trade area incentives, Ms Whitmore said.
There were 400 new Harley-Davidson motorcycles registered in Thailand in 2016, down from 469 units in 2015, 578 units in 2014, and the peak of 1,005 in 2013.
As of 2016, there were a total of 10,878 Harley-Davidson motorcycles registered in Thailand.
Suchart Arunsaengroj, vice-president of AP Honda, sees good long-term prospects for the big-bike market with an average growth of 15-20% a year.
"For Japanese brands, the big bike's retail price tags will become more attractive for buyers when the import tariffs under the Japan-Thailand Economic Partnership Agreement (JTEPA) are completely eliminated by the end of 2017," he said.
The JTEPA has entailed cutting the 30% import tariff on big bikes and their parts by five percentage points a year.
According to the Federation of Thai Industries (FTI), which started collecting statistics of big bike production above 400cc in Thailand last year, big-bike production totalled 115,008 units last year out of a total of a completely built-ups (CBU) output of 1.82 million units all for bikes.
From January to April in 2017, the big bike output totalled 56,124 units, up 26.2% from the same period last year.
Surapong Paisitpatanapong, a spokesman for the FTI's automotive industry club, said Thailand was not the largest motorcycle market in Asean in terms of sales, trailing Indonesia and Vietnam which sold 6.215 million and 3.12 million units last year, respectively.
Thailand sold 1.74 million units last year.
However, he said, Thailand's motorcycle industry has shown a positive trend over the past several decades and was on par with the vehicle industry in terms of automotive supply chain and logistic system, which can convince world-class motorcycle brands to set up their manufacturing facilities here.
"The country's motorcycle industry has a capability to produce both mass segment and high-value motorcycles like big bikes," Mr Surapong said, adding that Thailand was now the international export hub for motorcycles and big bikes, both CBUs and CKDs.
The FTI reported Thailand exported 299,026 CBU motorcycles in 2016, down 14.5%, but completely knocked-down motorcycles were shipped at 625,891 sets last year, up 6%.
Both types had a shipment value of 45.22 billion baht in 2016, down 3.7%.
Over the first four months, the country shipped 129,873 CBUs, up 26.8%, and 188,958 CKD sets, down 9.9%, with combined value of 18.124 billion baht, up 6.2%.
According to Mr Surapong, the club forecasts the country will export 300,000 units of CBUs this year, up 0.3%, while export of CKD motorcycles is unpredictable because it depends on each manufacturer's planning. The total output is expected to increase 15.4% to 2.1 million motorcycles.
At present, there are many motorcycle brands running their own production plants in Thailand, producing engine size of 110cc-above, such as Honda, Yamaha, Suzuki, Triumph, Kawasaki, Ducati and BMW.
The manufacturers of 250cc-above are eligible to apply for Board of Investment (BoI) privileges, and Triumph, Kawasaki and Ducati have been granted permissions to make their big bikes here, with a combined investment of 8.7 billion baht.
"The number of Thai big-bike riders has increased every single year since 1995 when the government unlocked the registration of bigger motorcycles," Col Polsak said. "At present, Thais can afford to buy the big bikes, similar to fans of supercars, and these big bikes can be used not only for everyday riding, but also for travelling or recreation."