Motorcycle sales should remain steady despite stringent loan approvals
Sales of motorcycles are expected to remain steady this year despite the Office of the Consumer Protection Board (OCPB)'s supervision of vehicle hire-purchase and its knock-on effect on loans from financial institutions, according to the Thai Motorcycle Hire-Purchase Association.
Thailand's motorcycle sales in the first 11 months of 2023 were recorded at 1.72 million vehicles, up 4.67% year on year, and when December figures are added, the total for the year should hit 1.85-1.9 million.
The announcement, which came into effect in January 9 last year, specified that the effective interest rate should not exceed 23%. This caused financial institutions to strictly control the granting of loans and inspect buyers' credit scores.
That move could cause this year's non-performing loans to be around 5-7%.
Motorcycle sales also depend on economic factors, with the association saying that sales are expected to grow along with the growth in agricultural sector but noting that growth in the tourism and export sectors tends not to boost sales.
This year's motorcycle loans are expected to remain steady at 80 billion baht despite digital lending which help facilitates low-income people to access loans. However, the Association also expects loan approval to drop to 50% and the granting of loans to drop by 10-15% due to financial institutions' stringent inspections.
The agency is monitoring whether informal loans and scamming are among the factors that boosted last year's motorcycle sales. Scammers' tricks include helping to purchase motorcycles before reselling them in neighbouring countries or allowing them to enter auction.
Avoiding payment of installments and allowing motorcycles to be confiscated for auction caused a decline in the motorcycle price, a source pointed out, adding that the volume of motorcycles on auction had increased threefold.
