Chinese to boost quality of motorbikes

Rendi A. Witular, The Jakarta Post, Jakarta

Competition in the country's motorcycle market will become fiercer in the future as China gears up to boost the quality of its products but at the same time maintain their cheap prices, according to an executive of the industry.

Chairman of the Indonesian Motorcycle Industry Association (AISI) Ridwan Gunawan said that Chinese motorbike makers were learning quickly from the disappointing performance of their products here.

"They will improve the quality of their products. I predict in the near future their product will not just be cheap but also reliable. Thus, they surely will undermine the domination of Japanese motorbikes in the (local) market," said Ridwan.

Chinese-made motorbikes caused nervousness among Japanese producers when they managed to grab a 20 percent share of the Indonesian market during their debut here in the late 1990s. In comparison, Honda, which has long been established in the Indonesian market, controlled a 50 percent market share.

Analysts have said that the Chinese-made bikes managed to grab a significant market share in their early days because of their low prices, at Rp 3 million to Rp 5 million each, only half the price of Honda products.

However, as many later complained about the quality of the motorbikes, sales of the Chinese-made products started to drop. Sales for this year are projected to reach only 150,000 units, compared with more than 200,000 units in 2000.

The decline was mainly attributable to the low quality of the products and relatively poor after-sales service compared with that of Japanese brands.

At least 57 brands of Chinese motorcycle entered the Indonesian market after the government eased regulations on the import of completely built-up motorcycles in late 1990s.

But, as of now, only 10 Chinese brands have survived.

Ridwan was, however, convinced that the Chinese motorbikes would, in the near future, regain popularity with Indonesian middle- to lower-income families.

They would become a serious threat to the Japanese brands, which control Indonesia's motorcycle market of 2.5 million units.