Motorcycle sales to grow 20 percent, less than last year

The Jakarta Post, Jakarta

After enjoying a 38.14 percent increase in sales last year, the country's motorcycle market is likely to grow by "only" 20 percent this year due to, among other things, the government's plan to increase fuel prices in the first quarter.

"Total sales of motorcycles in Indonesia increased from 2.82 million units in 2003 to 3.9 million in 2004 and are likely to reach 4.6 million this year," Indonesian Motorcycle Industry Association (AISI) chairman Ridwan Gunawan told a press conference on Friday.

He said AISI's six members -- Yamaha, Suzuki, Piaggio, Kymco, Kawazaki and Honda -- contributed some 90 percent of total sales while non-members the other 10 percent.

AISI vice president Gunadi Sindhuwinata explained that this year's 20 percent increase projection was based on an assumption that the country's economy would grow by 5.5 percent, the government's plan to increase fuel prices in March, and an expected weakening in the rupiah's exchange rate against the U.S. dollar, which would increase raw materials prices.

Meanwhile, AISI deputy chairman for commercial affairs Bambang Asmarabudi said that last year's motorcycle sales contributed almost Rp 40 trillion (US$4.35 billion) to the country's gross domestic product.

Affordable prices for motorcycles -- between Rp 8 million and Rp 11 million per unit -- plus easier requirements for securing vehicle loans, have encouraged increased motorcycle sales.

The Central Statistics Agency (BPS) revealed that the number of motorcycles in the country, which has 215.20 million people, amounted to 21.7 million units in 2003.

A recent study by the Japanese International Cooperation Agency (JICA) showed that 3.8 million of the motorcycles are in Jakarta.

Ridwan said the association was optimistic that steady growth in the motorcycle industry would continue in the future due to inadequate transportation infrastructure and the more relaxed requirements for securing vehicle loans. (004)