Thailand: AP Honda predicts excise price hike

• May 17, 2019

AP Honda forecasts that the new excise tax for motorcycles, effective from 2020, could add 200-10,000 baht to retail prices, depending on model size. 
Last Tuesday, the cabinet approved a new calculation for motorcycle excise tax, shifting from engine size to CO2 emissions. 
Electric and fuel-based motorcycles releasing emissions of less than 10 grammes per kilometre will be taxed at 1%. 
Fuel-based or hybrid motorcycles with CO2 emissions of 10-50 g/km will be taxed at 3%, 51-90g/km at 5%, 91-130g/km at 9% and more than 130g/km at 18%. 
The existing structure has engines sized under 150cc taxed at 2.5%, 151-500cc at 4%, 501-1,000cc at 8% and above 1,000cc at 17%. 
Honda’s models for 110cc, 125cc and 150cc engines release CO2 emissions in a range of 10-50 g/km, which means taxes will rise by 0.5-3% next year, said a source from AP Honda who requested anonymity. 
“The new tax means that for every 10,000-baht increase in retail price, the excise tax will rise 50 baht based on the new calculation for a motorcycle with an engine of less than 150cc,” the source said. “For example, taxes will rise by 200-250 baht for motorcycles priced at 40,000-50,000 baht.” 
Larger engines typically release higher emissions, so the price tags of sport motorcycles and big bikes could increase by roughly 10,000 baht. 
“Some larger engines will not be much more expensive because they release less emissions,” the source said. 
The source said AP Honda has to bring all models to be tested for CO2 emissions by the Thailand Industrial Standards Institute (TISI) before the new tax regime is effective next year. 
“The eight remaining months this year are enough for AP Honda to comply with the new tax structure,” the source said. “But the company is waiting for a legal announcement from the government in order to plan for future prices.” 
The source said new motorcycles from 2020 onwards will be designed to use new technologies to release lower emissions and comply with cheaper taxes. 
Yesterday, AP Honda launched the 110cc Zoomer-X, which releases CO2 emissions below 50 g/km and is compatible with the Euro 4 standard and E20 petrol. 
The new Zoomer-X also complies with the TISI’s Level 7, upgraded from Level 6, which includes the Euro 3 standard. 
In 2019, AP Honda aims to stimulate the local market with new models. The Zoomer-X is expected to gain sales of 30,000 units in 12 months. 
AP Honda reported that the past 12 months saw 1.79 million motorcycles sold in the overall market, down 2%, while Honda sales stood at 1.4 million, down 1%. 

Source: https://www.bangkokpost.com/business/news/1679256/ap-honda-predicts-excise-price-hike