First quarter motorcycles sales down by 25%
The Jakarta Post, Jakarta
Motorcycle sales during the first quarter of this year are expected to decline by around 25 percent compared to the same period last year due to weakening purchasing power of the people in that market segment, according to an industry executive.
Marketing director of PT Astra Honda Motor (AHM) Johannes Hermawan estimated sales in the January to March period would fall to some 862,000 units from 1.15 million units in the same period last year.
"In the first quarter of this year sales declined by around 25 percent. This is the impact of the fuel hike policy," Johannes was quoted by Antara over the weekend.
He said that the fuel price increases, which more than doubled, had forced people to delay motorcycle purchases, while those who purchased ones using bank loans were now seeking an extension on the loan installments.
"Many consumers are renegotiating their credit repayment, including requests for a longer installment period," he said.
The government raised fuel prices in October by an average of 126 percent following soaring oil prices on the international market. Analysts said that the move had eaten into the people's purchasing power and slowed down economic activities as the central bank also pushed up its key interest rate to help curb the resulting inflationary pressure.
Economic growth in the fourth quarter of last year slowed down to 4.9 percent year-on-year, compared to 5.6 percent in the third quarter.
Analysts have said that inflationary pressure may start to ease in the second half of this year, and the central bank is likely to start lowering interest rates in the latter part of the second semester.
Johannes said that the domestic motorcycle market was expected to recover in the second half of this year, but quickly added it would depend on whether the interest rate went down and if the government spends more on helping revive economic activities.
AHM vice president Tossin Himawan acknowledged that the shrinking motorcycle market had forced the company to cut production to two shifts per day from the usual three shifts.
Johannes said that AHM had targeted motorcycle sales to reach 2.3 million units this year, with a market share of around 52 percent.