Indonesia. Two-Wheeler market boomed 7% in the first half 2019. Honda shines

Indonesia Motorcycles

Indonesian Motorcycles market was reported in very good shape during the first half 2019 reporting sales up 7%. The market benefit from the +7% reported for the market leader Honda, while the key competitor, Yamaha, is growing faster. The new e-scooter local brand, starts selling 1.000 units per month.


Economic Environment

In the second quarter of the year, growth should have been broadly unchanged from that of the first quarter. Domestic signs are generally encouraging: Retail sales grew rapidly in April and May, likely supported by buoyant consumer confidence, while the manufacturing PMI averaged higher than in Q1. However, goods exports plummeted in April and May, while tourist arrivals stagnated over the same period, potentially dampened by recent floods. That said, lower imports, amid government measures to contain the current account deficit, could have offset the damage to the external sector in the second quarter.

Economic growth should be robust this year, with private consumption buttressed by a strong labor market and optimistic consumer sentiment. However, fixed investment will be held back by government measures to curb imports. Downside risks stem from global trade tensions and the rupiah’s vulnerability to global financial volatility.


2019 Motorcycles Market

The start of the 2019 for the Indonesian motorcycles market was above expectations. Indeed combined sales between local producers and importers have been 573.444 (+17.8%) in January, 536.176 in February (+20.8%) and 581.595 in March (+7.8%) ending the first quarter with 1.691.215 units (+15.0%). 

In the second quarter the growth speed declined. However at the end of the first half of the 2019, the total motorcycles sold have been 3.25 million, up 7.4% from the correspondent period last year

The market has been pulled up by the leader, Honda, which reported an increase of 7.2% with over 2.4 million sales.


Market Trend

The Indonesian motorcycles industry is the third in the World since almost twenty years representing the primary private transporting sector for people and goods and having a size 6 time bigger than the automotive industry.

The market hit the record at the end of last decade reaching for the first and lonely time the 8 million units sold in a calendar year. Then the market entered in a mature stage and sales declined progressively, down to the 5.8 million scored in the 2017, the lowest level in the last 15 years.

However, fueled by a quite positive economic trend, in the 2018 the market has changed the trend taking a positive path and sales finally were back over 6 million units ending the year at 6.38 million sales, up 8.4%.

The market is dominated by Japanese brands with Honda holding 73% of market share (in 2018) and Yamaha at 21%. However, in recent years several new brands landed in the country from India, Europe and US and over 30 brands are imported in the country with sales progressively growing. This is not the case of MV Agusta, which has lost the importers in the 2017 for bankrupt and is struggling to find a new one.

A strong impact is having on the premium segment market the aggressive strategy put in place by KTM supported by the Indian partner (and 48% shareholder) Bajaj Auto. After entering the market in the 2016, the Austrian brand during the 2018 started to supply from the Bajaj Auto’s 100% owned subsidiary PT. Bajaj Indonesia, located in Chakan producing with a CKD system probably aiming to base in Indonesia a hub for the entire region.

At the moment KTM distributes in Indonesia a short line up including the KTM 200 Duke, 250 Duke and the 390 Duke. It is almost possible the plant will start to produce the Bjaj Auto Pulsion 220 to be distributed in Indonesia.

During the last Indonesia International Motor Show it was announced the start-up of a new local venture, 100% with Indonesian resources, aiming to boost the electric-powered motorcycles segment. A local enterprise, the PT Wijaya Manufacturing plans to produce 60,000 electric-powered motorcycles in 2019. The company is a collaboration between state-owned enterprise Wijaya Karya Industri dan Konstruksi and private firm Gesits Technologies Indo. Actually Gesits is selling near 1.000 e-scooter per month.

The investments in the low emission vehicles are considered crucial to reduce pollution and to revamp the industry.


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