Motorcycle sales to surpass precrisis level in 2002

The Jakarta Post Jakarta

Looking at the improved economic situation, the Indonesian Motorcycle Industry Association (AISI) predicts that motorcycle sales will surpass the two million mark this year,

Association chairman Ridwan Gunawan predicted that sales would increase by 10 percent to about 2.1 million motorcycles this year, surpassing the precrisis sales level of 1.85 million units.

"At a conservative level, a 10 percent sales growth is logical this year," Ridwan said in a statement, adding that AISI members plan to produce a total of two million motorcycles.

AISI groups agents and assemblers of popular Japanese brands such as Honda, Yamaha, Suzuki and Kawasaki as well as Italy's Piaggio Vespa.

Producers of Chinese motorcycles, which started to challenge the domination of Japanese motorcycles in the country after the economic crisis, are not members of the association.

AISI said that as of November last year its members recorded domestic sales of 1,571,426 motorcycles, higher than the 898,572 units over the same period in 2000.

"Sales were strong in December 2001 but due to the shorter production days, total sales for 2001 probably reached 1.67 million units," he said.

The association projected that total domestic sales, including those from outside AISI members, would reach around 1.8 million units in 2001.

Motorcycle sales of AISI's members dropped to their lowest level of 492,626 in 1998 from 1.85 million in 1997 as the country suffered the pinch of its worst economic crisis.

Motorcycles' sales started to recover in 1999, with total sales of 587,402 units.

Sales further increased to 979,000 motorcycles in 2000, despite the entry of several Chinese brands into the domestic market.

At least 57 brands of Chinese motorcycles have entered the Indonesian market since the government eased regulations on the importation of completely built-up motorcycles in late 1999.

Ridwan predicted that total imports of built-up motorcycles would reach 250,000 units this year, of which about 150,000 units would come from China.

He said that the implementation of the World Trade Organization agreement would make it difficult for Chinese motorcycle producers to export more products to Indonesia.

"So the imports of motorcycles from China will not be too dominant while intra-ASEAN trade will increase following the implementation of the ASEAN Free Trade Area (AFTA) this year," he said.

Under the AFTA scheme, three ASEAN countries -- Indonesia, Thailand and the Philippines -- will open their markets for automotive products that meet local content requirement with lower import tariffs of between zero and 5 percent.

Ridwan added that AISI members planned to export around 150,000 motorcycles this year.

Indonesia exports its motorcycles mainly to Vietnam, the Philippines, Argentina and Brazil.