Although the Thai motorcycle market may be
smaller than the Indonesian or Vietnamese markets in volume, in terms of
quality and strategy Thailand plays a big role as major motorcycle
manufacturers have all pinned their hopes on the country with continuous investment
to expand production and set up R&D centres.
Many are of the opinion that the Thai
motorcycle market has reached a stage of saturation, but it has not lowered
competition among manufacturers. On the contrary, the competition is as fierce
as ever despite the small number of major players compared to the automobile
market.
In January, motorcycle sales in Thailand
grew by as much as 20 per cent compared to the same month last year, with
growth experienced in every segment.
The first major case in the industry in
2013 involves AP Honda, distributor of Honda motorcycles in Thailand. The Trade
Competition Act Committee has finally decided to seek legal action against AP
Honda for alleged unfair sales practices before the statute of limitations on the
marathon case expires in April.
If the state's lawyers agree to pursue the
case, it will be the first prosecution under the Trade Competition Act. The
investigation has taken almost 10 years. AP Honda was sued by Kawasaki and Thai
Suzuki Motor for pressuring its dealers to carry Honda motorcycles exclusively.
This is a case that is being closely
followed, since Honda has been the market leader for as long as 25 years.
Honda's fuel-injection engines are highly accepted by Thai consumers while
heavy marketing has been carried out for every model. Honda has also been
involved in relations marketing among customers and dealers, which also led to
the marathon case it is facing.
Last year, Thai motorcycle sales hit 2.13
million - up 6 per cent compared to 2011 figures. Honda motorcycle sales alone
reached a record 1.485 million - up 7 per cent compared to the previous year.
This is the second consecutive year that Honda has broken its sales record. Its
market share is 70 per cent, up 1 per cent. Honda has now accumulated sales of
more than 20 million units in Thailand, which is the fourth country in the
world to do so after Japan, India and Indonesia.
The company's success stems from its
effective product strategy, pointed out AP Honda president Chiaki Kato. He said
each Honda model has created history in Thailand - such as the Dream,
Nova/Tena, Wave 100, Click and Scoopy-i.
Honda started 2013 by introducing five new
models and launched a plan for excellence in every area. The company plans to
reap sales of 1.55 million units from the projected 2.15-million market. Among
the highlights are the MSX 15 mini street bike, Forza 300 large scooter and
CRF50M motard.
Kato said the Thai economy is expected to
maintain growth and stability.
"The launch of the five models is part
of our strategy to offer products that are above market expectations, which is
the initial measure in our 3-year mid-term plan," he said.
Kato said that for 2013, which is the last
year of the mid-term plan, Honda is planning a large number of activities,
including sports marketing. Honda is an official sponsor of Liverpool and
Manchester United.
Meanwhile, Honda plans to increase the
number of Honda Wing centres and Honda Wing shops to 1,250 this year.
AP Honda director Suchart Arunsaengroj
stressed his company would go ahead with continuous business moves, including
sales, marketing and investment.
Just last year the company spent 600
million baht (US$20 million) to start a big-bike production line in Thailand,
he said.
"Actually the market share that the
company has comes mainly from consumer demand. When we first started out we had
a market share of only 20 per cent, but then our customer base started to grow
due to the continuous product launches," he said.
Suchart added that Honda had invested as
much as 850 million baht to set up an R&D Centre in Thailand, making the
country its centre for automobile and motorcycle research and development,
developing parts locally, and CBU vehicle testing. Honda's Thai R&D Centre
serves customers in 18 Asia-Oceania countries.
According to the Land Transport Department,
180,153 new motorcycles were registered in January, up 20 per cent compared to
the same month last year. This is due to the demand created from the market
slowdown in early 2011, as well as the government's minimum wage increase that
has resulted in higher purchasing power.
Honda registrations in January were 132,097
units, equivalent to a 73-per-cent market share, followed by Yamaha with 34,857
units (19 per cent), Suzuki with 5,060 units (3 per cent), Kawasaki with 4,604
units (3 per cent) and other brands with 3,635 units (per cent).
Yamaha, the market's No 2 player, may be
far behind Honda with just a 20-per-cent market share, but it has been
aggressive with its lifestyle marketing activities for the popular Fino model.
With accumulated sales of the Fino reaching
1.5 million, Yamaha is now giving away free gold necklaces for every purchase.
The company is spending more than 100 million baht on this marketing drive.
Last year Yamaha achieved record sales of
490,000 units, which is the highest in 10 years, said Thai Yamaha Motor deputy
managing director Praphan Pholthanavasit. Half of Yamaha's sales comprise
motorcycles with automatic transmissions.
Yamaha had originally targeted sales of
600,000 units and a 30-per-cent market share last year but, Praphan said, the
government's First Car Buyer Programme had a larger effect than his company
anticipated.
"The lost sales were mainly due to the
First Car scheme, with many of our customers deciding to purchase automobiles
instead. We are not expecting a big recovery this year as vehicles under the
First Car scheme are still being delivered," he said.
Motorcycle demand is expected to rise by 3
per cent to 2.2 million units this year, according to Praphan.
"Yamaha's target is 550,000 units this
year, equivalent to a growth of 12 per cent," he said.
Yamaha will not only bank on new
fuel-injection technologies that offer higher fuel efficiency but the company
will also come out with unique motorcycle designs.
"We are also doubling our marketing
budget to 600 million baht to achieve a 40-per-cent market share in the
automatic-gearbox market and 12 per cent in the manual-gearbox market," he
revealed.
Yamaha's sales network expansion will see
the number of Yamaha Square outlets being raised to 666 outlets this year.
Praphan said that although the motorcycle
market may seem saturated, there is still high demand.
"We can say that Thailand has gone far
in development compared to other countries in Asean. But not long from now
markets in other nations will catch up, but Thailand will continue to be one of
our most important markets in the region," he said.
Market competition is expected to heat up
further this year due to the introduction of new products in new market
segments.
"Although there are just a few brands
in the market, as much as 3 billion baht could be spent for marketing and
advertising this year," he added.
According to an industry source, Yamaha may
seem like it could be compared with Honda, but the other brands are still far
behind.
"Honda has fewer rivals each day.
Today Suzuki has only 5 per cent of market share and 50 dealers, along with
internal problems after a major restructuring. So even if the product is
competitive, Suzuki is still not strong enough to emerge a competitor. Brands
from China are even further behind regarding funding and sales networks in
Thailand. The Thai market has not accepted Chinese motorcycles all too well due
to their quality and image that are far behind the market leader," he
pointed out.
*US$1=29.8 baht
(Kanittha Pantong/The Nation - asianewsnet.net)