Thailand's motorcycle manufacturers squeezed by inflation

Increased inflation also means greater uncertainty about prices. Prices that didn't move in years suddenly shoot upwards. To sell their goods for a profit, business people must predict: 1. exactly what the new higher prices will be, and 2. what the effect of these higher prices will be on their business. Doing business becomes more like gambling.

Rural incomes are likely to increase this year due to two factors: 1. higher crop prices (rice, sugar) and, 2. increased government spending in rural areas.

Higher rural incomes might lead to increased motorcycle purchases, but higher oil and food prices may also make poorer consumers delay decisions to purchase new motorcycles. Facing this uncertainty, one strategy that is being planned is to cut marketing and promotion costs and maintain motorcycle prices at their current level. Then at least people who are planning to buy a motorcycle this year won't suddenly change their mind when they see higher prices.

Whether the baht appreciates relative to other currencies in the region will determine the price of Thai motorcycles in other Asian countries and, in turn, export demand for Thai motorcycles.

Last year 553,619 new motorcycles were sold in Thailand which means the motorcycle industry in Thailand grew by 5%. Not all motorcycle producers fared equally.

Yamaha led the pack with growth of 16% on sales of 142,341 motorcycles. Yamaha's market share increased to 26%, up 2.4%. Yamaha's best selling model is The Fino, a 115cc motorcycle with an automatic transmission launched two years ago and now accounting for 60% of all Yamaha sales. The current production capacity of 20,000 units per month for The Fino is not sufficient to keep up with demand and production capacity at Yamaha has been shifted to The Fino.

Honda has long been the market leader with a market share slipping a little from 70% to 68.4% this year on sales of 378,479 so far this year.

(See first photo above of a race between a three-wheel kart and motorcycles at the headquarters of the 11th Infantry Regiment of the Royal Guard during a contest to find vehicles which go farthest on the least amount of petrol. A total of 409 teams entered the two-day competition organised by Honda. The second photo shows the deputy transport minister trying out a motorcycle simulator set up by Thai Honda Manufacturing at an exhibition on driving safety.)

(Source: Bangkok Post, business section, 01-05-08, page B3, SANTAN SANTIVIMOLNAT, temp-link)

Vocabulary:

squeezed - manage to get through a small space (here used to mean there is very little room to operate the business, one mistake and the business loses money) รอดพ้น  (ในที่นี้หมายถึง ธุรกิจที่สามารถพยุงตัวให้ผ่านพ้นวิกฤตการณ์ทางเศรษฐกิจได้)

raw materials - materials before being used in manufacturing วัตถุดิบ

production costs - the money that must be spent to produce goods for sale  ต้นทุนการผลิต

uncertainty - not knowing what is going to happen in the future ความไม่แน่นอน

maintain at their current level - quantity does not change รักษาระดับ (ราคา) ในปัจจุบันไว้

change their mind - change their opinion about something เปลี่ยนใจ เปลี่ยนความคิด

baht appreciates - value of the baht goes up, making Thai exports more expensive and foreign imports less expensive การแข็งตัวของค่าเงินบาท

fared equally - did equally as well ทำได้ดีเท่าๆ กัน

led the pack - beat everyone else, came in first place  จ่าฝูง  เป็นที่หนึ่งในกลุ่ม

market share - the percentage of the market for a good or service that a company possesses  ส่วนแบ่งของตลาด

market leader - the company with the greatest market share  เป็นผู้นำในตลาด / ธุรกิจ

automatic transmission - motorcycles and cars that can change gears automatically as the vehicle moves freeing the driver from having to shift gears manually (See Wikipedia)  การเปลี่ยนเกียร์อัตโนมัติ

X accounting for Y% of Z - X is Y% of Z  

production capacity - the largest amount that can be produced with the current factory and equipment being used  ความสามารถในการผลิต

shifted to - moved to เป็นไปยัง

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