Motorcycles are displayed at the Bangkok Motorbike Festival on February 19, 2019 (Source: bangkokpost.com)

 

Hanoi (VNA) – Japanese motorcycle manufacturer Honda Motor Co has forecast that its sales in the Thai market will fall in 2019 due to a drop in the prices of agricultural products.

New motorcycle sales in 2019 are predicted to drop 3.9 percent year on year to 1.72 million units, Suchart Arunsaengroj, Vice President of AP Honda Co, the company's Thai sales subsidiary, told reporters last week. The forecast is unchanged from its January projection.

The baht's depreciation against the dollar leads to fluctuations in exports and lower prices in agricultural products, resulting in declining purchasing power among farmers, the main purchasers of motorcycles, he said.

The local unit, which holds nearly an 80 percent share of Southeast Asia's third-largest motorcycle market, smaller only than Indonesia and Vietnam, saw its first drop in annual sales in three years in 2018 to 1.4 million units, down 1.4 percent from the previous year.

The US-China trade war loomed over the Thai economy in addition to low produce prices and a slowdown in tourism, Yoichi Mizutani, president of the subsidiary, said in January.

Despite the challenges, coupled with political uncertainty stemming from the upcoming election on March 24, the firm posted a 0.7 percent year-on-year sales increase in the family-use segment in the first two months of this year to 154,000 units.

But it suffered a 22.5 percent plunge in sales in the sport model segment to 31,000 units over the same period, Arunsaengroj said at a press conference.

Some analysts predict that these economic challenges will persist throughout 2019.

Agricultural products' prices and farmers' incomes are showing no clear improvement, with prices of some significant products like palm oil falling, according to the latest report from the Office of Agricultural Economics.-VNA