Motorcycle sales expected to be flat this year

The Jakarta Post, Jakarta

New motorcycles sales will remain flat this year on weaker consumer spending, the Indonesian Motorcycle Industry Association (AISI) says.

"For the last three years we have enjoyed significant growth of up to 25 percent per year, but this year, in line with the decline in people's purchasing power, motorcycle sales are predicted to be flat," AISI deputy chairman Gunadi Sindhuwinata told The Jakarta Post on Tuesday.

He said that even if Indonesia's economic growth this year turned to be higher than the government's 4 percent target, sales could only grow by 15 percent.

Motorcycle purchases are usually used as one of the indicators to measure domestic consumption.

Many analysts have predicted that consumer spending, which has been the main factor in pushing the country's economic growth, would slow down this year as increasing numbers of people have become turned jobless due to the slow economic recovery, the outbreak of SARS and the impact of the recent war in Iraq.

Analysts are now predicting that growth this year will be slower than the government's projection.

According to first quarter figures issued by PT Astra International, motorcycle sales in March dropped by 6.5 percent to 203,520 units.

Astra, which makes and sells Honda motorcycles with Japan's Honda Motor Co., said it sold 114,019 motorcycles in March, down 21 percent from a month earlier.

While other brands such as Suzuki, Yamaha, Kawasaki, Piaggio sold 89,501 new motorcycles.

Sales of new motorcycles in Indonesia rose nearly 27 percent to 2.29 million units in 2002 from the previous year.

In the first quarter of this year, Astra sold 392,504 motorcycles, up 24 percent from 315,034 units a year earlier.

Astra said it still dominated the market during the first quarter, with around 62 percent of total motorcycle sales in the country.