Bosowa to start motorbike production soon
Bosowa to start motorbike production soon
JAKARTA (JP): Bosowa Group, a diversified business group based
in Makassar, South Sulawesi, said on Friday it would start the
commercial production of its motorcycle plant next month.
Aksa Mahmud, the president of the business group, said the
company would cooperate with South Korean motorcycle producer
Hyosung Motors & Machinery Inc. in motorbike production.
He said the company, which had spent about $20 million in
investments for the motorcycle plant, was expected to produce
about 10,000 motorcycles with engine sizes of between 50cc and
125cc this year.
The production capacity will be increased to 60,000
motorcycles next year to meet the expected bullish demand, he
said, adding that the company would still import important parts
for the motorcycles within the next few years.
"The local content of the motorcycles will be about 30
percent. But we are sure we will be able to compete with existing
producers even though most of the components will still be
imported," he said after the signing of a technical cooperation
agreement with Hyosung.
The motorcycles, which will be produced at the company's
assembly plant in Karawang, West Java, will be sold in the
domestic market under the brand name of BSW. The new motorbikes
will compete with several established names such as Honda,
Yamaha, Kawasaki and Suzuki.
The prices of the Japanese motorcycles with an engine capacity
of 100cc range between Rp 10 million and Rp 11.5 million at
present.
"We will sell our motorcycles cheaper than the Japanese
motorbikes," he said.
Indonesia's motorcycle market, the third largest after China
and India, suffered a major setback in 1998 with the impact of
the country's worst ever economic crisis. Total motorcycle sales
in the domestic market, which reached 1.88 million in 1997,
dropped to 430,948 motorcycles in 1998 due to the crisis.
The industry showed signs of recovery last year with total
sales rising to 487,759 motorcycles, according to data provided
by the Association of Indonesian Motorcycle Sole Agents and
Manufacturers.
Monthly sales rose to 59,981 motorcycles in February from
40,498 in January.
Chairman of the association Gunadi Sindhunata said the
country's motorcycle production was expected to increase to
700,000 motorcycles this year.
Indonesia still restricts imported motorcycles from entering
the country to protect the local motorbike industry, which has so
far invested about $400 million to develop their assembling
operations. (07)