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Thailand's motorcycle manufacturing and sales are declining this year as the economy falters, attributed to high household debt and weak consumer purchasing power, says the Federation of Thai Industries (FTI).
People are cautious about spending because of uncertainty about the sluggish economy, while several companies recently decided to lay off a total of 10,000 workers to control operating costs, said Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for the federation's Automotive Industry Club.
High household debt caused banks to tighten the criteria for car loans, which affects car and motorcycle sales in the country.
During the first four months of this year, Thailand's Manufacturing Production Index averaged 98.2 points, a year-on-year decrease of 2.06%, attributed mainly to sluggish car manufacturing amid high household debt and elevated energy prices, according to the Office of Industrial Economics.
"These problems, together with a delay in state budget spending earlier this year, dealt a blow to the economy," said Mr Surapong.
The lengthy process of forming a coalition government in 2023 caused a delay in budget allocation, with the House of Representatives giving the greenlight to the 3.4-trillion-baht budget bill in March this year.
The club has no plan to adjust its motorcycle manufacturing target for this year, believing the government will launch new measures to boost economic activities, said Mr Surapong.
Thailand is expected to produce 2.12 million motorcycles this year, with 1.7 million units manufactured for domestic sales and 420,000 units made for export.
From January to May this year, total motorcycle manufacturing fell by 5.6% year-on-year to 1.01 million units, composed of 837,975 completely built-up units, a decrease of 8.9%, and 175,690 completely knocked-down units, an increase of 14.2%.
In this five-month period, domestic sales of motorcycles fell by 9.1% year-on-year to 739,988 units while motorcycle exports dropped by 5.5% year-on-year to 359,603 units, according to the club.