The Federation of Thai Industries (FTI) is maintaining its target for motorcycle production at 2.1 million units this year, though manufacturing in September fell by almost 20% year-on-year as banks tightened loan criteria.
Thailand is expected to produce 1.75 million motorcycles for domestic sales and 350,000 units for export as financial institutions fret over high household debt in the country.
Household debt exceeds 90% of the country's GDP, causing banks to be more careful in granting car loans to avoid non-performing loans.
The high season for tourism and increased revenue for farmers after the harvest in the fourth quarter are expected to expand motorcycle sales during the last three months of the year, said Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for the FTI's Automotive Industry Club.
"We expect consumer purchasing power to improve in this quarter, which should increase motorcycle manufacturing," he said. "The semiconductor shortage also eased, so manufacturers will have enough chips for production."
According to the club, Thailand's motorcycle manufacturing in September dove by 20% year-on-year to 199,854 units. Of the total, completely-built up (CBU) motorcycles decreased by 14.3% year-on-year to 169,054 units, while completely knocked-down (CKD) motorcycles plummeted by 41% year-on-year to 30,800 units.
From January to September, motorcycle output decreased by 3.2% year-on-year to 1,888,254 units. During this period, CBU motorcycles increased by 11% year-on-year to 1,638,051 units, but CKD motorcycles fell by 47.5% to 250,203 units.
Domestic sales of motorcycles were sluggish in September, dipping 5.8% year-on-year to 141,455 units.
For the first nine months this year, domestic sales increased by 6.1% year-on-year to 1,446,338 units. Most of the units had internal combustion engines, but electric motorcycles gained in popularity, with battery-run motorcycle sales up 100% year-on-year to 220 units.
Mr Surapong attributed the increase in battery-run motorcycle sales to a discount of 18,000 baht per motorcycle from the government.
The club reported motorcycle exports the first nine months this year fell by 21% to 601,751 units.