AP Honda, the official Thai arm of the Japanese company's motorcycles, expects sales growth of 4% this year to 1.55 million units.

It has played down fears of negative effects from higher excise taxes on big bikes under the new tax structure.

"This year is expected to be a good year for the [motorcycle] industry, thanks to several positive factors including sound GDP growth of 5.5%, increased agricultural prices and the tourism boom," said sales director Suchart Arunseangroj.

AP Honda expects to sell 1.55 million motorcycles in a total market forecast to grow 7% to 2.15 million units in 2013, he said.

Last year, AP Honda sold 1.49 million motorcycles, pushing its market share to 70%. "Growth of 4% is normal for every year. In 2012, the market expanded by 7% because of the impact of floods the year before," Mr. Suchart said.

Excise tax increases will not have a big impact on overall sales, though they will affect big bikes with a cylinder capacity of 500cc or more, Mr. Suchart said.

Most motorbikes sold in Thailand are 150cc or below, for which taxes remain the same. The new tax structure, effective from January 1st, requires motorbikes of 500cc and above to pay 2% more on top of the existing 3% levied on ex-factory prices, Mr. Suchart said.

AP Honda revised its forecast for big bike sales in the overall market this year to 7,000 units, down from previous forecasts of 8,000. Honda will account for 3,000 of those motorcycles, he said.

Mr. Suchart said the big bike market is still expected to grow, from 5,900 units last year and 2,800 in 2011.

The new nationwide minimum wage of 300 baht (just under US$ 10) is expected to stimulate the purchase of motorcycles, especially in the middle and lower end of the market, Mr. Suchart said.

Mr. Suchart said the company will open 194 new sales outlets by the end of the year, adding to its 1,250 sales and service outlets in the country (called Honda Wing Centers). To expand the Honda BigWing network, the company plans to open three new outlets this quarter, in Pattaya, Udon Thani and Phuket.

After the success of the original branch in Bangkok and the second one in Chiang Mai, the new branches are expected to be the regional hubs of the East, Northeast, and South respectively. Honda BigWing provides standard "6S" services: sales, service, spare parts, safety, second-hand units, and society.

"Although the sluggish domestic economy in early 2012 resulting from the great flood in the previous year affected the export, tourism and agricultural industries, the economic rehabilitation plan by the government and the mutual cooperation among Thais have boosted the local economy back to normal faster than expected," said Chiaki Kato, president of AP Honda.

According to the Office of the National Economic and Social Development Board, Thailand's gross domestic product grew by 5.5 per cent last year, encouraging the local motorcycle market.

The accumulated domestic sales of the company have reached 20 million units, making Honda Thailand the fourth country to hit that milestone after Japan, India and Indonesia, Kato said. "The economy in 2013 will continued to grow with stability. Thanks to the increasing income of general consumers, the motorcycle market expects to see sales of 2.15 million units. AP Honda expects to reach its ambitious target at 1.55 million units," he said.

Honda is launching five new models this quarter - the MSX125, Forza300, CRF250M, Spacy i and the Wave110i.