Astra Honda motorcycle sales may Rise 25% in 2005
Astra Honda motorcycle sales may Rise 25% in 2005
Bloomberg, Jakarta
The Indonesian unit of Honda Motor Co., the world's biggest motorcycle maker, expects 2005 sales to increase by a quarter, helped by faster economic growth and political stability after a new president's election.
PT Astra Honda Motor, equally owned by Honda and Indonesia's PT Astra International, the nation's biggest auto distributor, may sell 2.5 million motorcycles next year, Astra Honda Vice President Tossin Himawan said in an interview on Monday.
"Economic growth is set to increase faster next year after the new president is elected," Himawan said. "This means there will be more investment, more activities in businesses such as agriculture, trade and mining, leading to a greater need for transportation."
The lack of sufficient public transportation is prompting many Indonesians to buy personal vehicles, said Daniel Irawan, who helps manage the equivalent of US$218 million at PT Batavia Prosperindo Aset Manajemen, including Astra International stocks.
"The heavy traffic makes it worse," said Irawan. "This is boosting informal transportation systems such as the ojek, which can be much faster, considering the heavy traffic."
Motorcycle taxis known as ojek, which transport passengers for a cheaper fare than a cab, are becoming popular in Indonesian cities.
Motorcycles are also used as a means of transport by vendors to deliver mail, food and other articles because they are faster than cars or buses when there is a traffic jam, Himawan said.
Astra Honda's 2005 sales would make up more than half the estimated 4.92 million motorcycles that will be sold in Indonesia, the world's third-biggest motorcycle market, or 25 percent more than the company's sales target of 2 million this year, Himawan said.
The company's sales of motorcycles rose to about 1.54 million units in the nine months ended Sept. 30, he said.
To meet increasing demand, Astra Honda began building its third plant in the country last month, the company said earlier. The $100 million factory, located in Bekasi, about 33 kilometers southeast of Indonesia's capital Jakarta, will begin production in October 2005.
The factory will have annual production capacity of about 1 million units. Astra Honda's existing plants are capable of producing 2 million units a year.