Motorcycle manufacturers see bright prospects ahead

Tony Hotland, The Jakarta Post, Jakarta

The local motorcycle industry is set to continue to grow to double-digits in the coming years on the back of an improving economy, more affordable prices, and less complicated bank credit requirements, industry players have said.

Deputy chairman of the Indonesian Motorcycle Industry Association (AISI), Gunadi Sindhuwinata, said that motorcycle sales could reach up to 3.6 million by the end of the year, 28 percent higher than in 2003.

"I'm quite certain we could materialize the target. Up until July, at least 1.8 million motorcycles had been sold. Double that, and we could even surpass the target," Gunadi told The Jakarta Post during the opening of the second Jakarta Motor Show here on Friday.

AISI groups six local motorcycle makers of global brands such as Honda, Suzuki, Yamaha, Kawasaki, Kymco and Vespa. They account for around 95 percent of total domestic sales.

Gunadi, who is also the president director of publicly listed PT Indomobil Sukses Internasional, said that currently Honda remained the most popular brand with a 51 percent market share, followed with Suzuki and Yamaha with around a 20 percent market share each.

"Our economy is getting better, there are more choices of financing companies offering credit with far less knotty requirements, and more flexible down payments.

"Besides that, informal sectors that rely on motorcycles is also growing...like the ojek (motorcycle taxi). So, the future is bright," he said.

He projected that sales would jump to around four million units next year.

"We still have vast room to grow, both in distribution and population growth. Our motorcycle usage to population ratio is still 1 to 20, while in Thailand the ratio is already 1 to 1.2," said Gunadi.

Domestic motorcycle sales in 2003 reached 2.8 million units. Based on data from the Federation of Asian Motorcycle Industries (FAMI), Indonesia remains the second largest market for motorcycles in Asia behind India, which sold almost six million units last year.

FAMI comprises Indonesia, India, Japan, Malaysia, the Philippines, Singapore, Thailand and Taiwan.

Furthermore, Gunadi said that "step-through" motorbikes would still dominate sales in the future due to the increasing demand for the type.

"Currently, 85 percent of the total sales are step-through bikes, while the remainder are the far more expensive ones, such as sportbikes," he said.

He explained that the step-through motorbike had a larger segment compared to the sport or other bikes, because it was far cheaper and can be used by either male or female.

Gunadi also said that since 1986, about 90 percent of the total components were from the local market. The remaining 5 percent are still imported, such as carburetors and specific bolts, he added.

Total sales of motorcycles of six leading brands

1999: 587,402

2000: 979,422

2001: 1,650,770

2002: 2,287,706

2003: 2,809,896

2004: 3,600,000*

2005: 4,000,000*

*: AISI projection

Source: The Indonesian Motorcycle Industry Association