Motorcycle maker sees no major investment<\/p>\n
Sandy Darmosumarto, The Jakarta Post, Jakarta<\/p>\n
Local demand for motorcycles is expected to continue rising
\nnext year, but local manufacturers have more than enough capacity
\nto fulfill the rise in demand.<\/p>\n
Thus, the Indonesian Motorcycle Industry Association (AISI)
\nhas predicted no additional investment planned by local
\nmotorcycle manufacturers in machinery to expand their production
\ncapacity next year.<\/p>\n
Association vice chairman Gunadi Sindhuwinata said the
\ncountry's motorcycle industry was now running at between 80 and
\n85 percent of its capacity. At full capacity, the industry can
\nproduce up to 3.5 million units annually.<\/p>\n
"With sales this year to hit around 2.8 million units and 3.2
\nmillion next year, the industry has until 2004 or 2005 before
\npreparing for reinvestment in order to expand its capacity,"
\nGunadi told The Jakarta Post.<\/p>\n
"Prior to the economic crisis in 1997, the industry and its
\nsuppliers -- which include local components manufacturers --
\nengaged in major reinvestment to double their capacities
\nfollowing predictions that local production would rise," he said.<\/p>\n
However, sales fell sharply after the economic crisis and
\ncould only recover to near pre-crisis level in 2001, four years
\nafter the economic crisis. That year, a total of 1.64 million
\nmotorcycles were sold in the country, against 1.85 million in
\n1997.<\/p>\n
The lack of reinvestment in basic manufacturing machinery
\nmeans there is no reinvestment at all, explained Gunadi.<\/p>\n
While all manufacturers who have excess capacity will withhold
\ninvestment plans to increase capacity next year, some of them are
\nexpected to invest to alter their production lines to produce new
\nmodels.<\/p>\n
Gunadi said that with rising per capita income and the
\nconsequent increase in demand, motorcycle manufacturers, who
\npossess excess capacity, may also invest in extending
\ndistribution and after-sales networks. This includes opening new
\nshowrooms and workshops.<\/p>\n
Additionally, local component suppliers are expected to
\nreinvest to support new motorcycle models, the rise in output and
\nthe demand from spare-part shops.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/motorcycle-maker-sees-no-major-investment-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}