Whispers of Electric Motorcycle Price Hikes Amid Rupiah Weakness
The national electric motorcycle industry is beginning to feel the pressure of the rupiah’s exchange rate against the US dollar, which recently breached Rp18,000/US$. Reliance on imported components has caused production costs to climb.
This situation is prompting a number of brand holder agents to consider raising retail prices in the near term. Such a move will be difficult to avoid if the rupiah’s weakening persists, as most electric motorcycle components still originate from overseas, especially China. Consequently, currency fluctuations directly impact the industry’s cost structure.
“Oh, certainly. The majority of components are still imported, you see. So if the rupiah exchange rate weakens, it is definitely tough now,” said Budi Setiyadi, Chairman of the Indonesian Electric Motorcycle Industry Association, on Thursday.
Discussion about price hikes has already begun to surface among industry players. Some companies have reportedly even communicated their plans. Budi disclosed that several brand holders have signalled they will adjust prices if the rupiah does not soon strengthen, though he could not yet detail the magnitude of the increase.
“Earlier, I had a few chats with some brand holders about raising prices in the near future if the rupiah does not strengthen considerably,” Budi said.
Nevertheless, not all producers are taking the same approach. Some are holding prices steady whilst monitoring exchange rate movements. Each producer’s decision will depend on their ability to adapt to the rising production costs caused by currency fluctuations.
“But there are also those who have not yet raised prices. There are some who may have already increased their prices, but I happened to meet a brand holder who will raise theirs in the near future,” Budi added.
He stressed that the greatest pressure comes from imported components, which continue to dominate the national electric motorcycle industry’s supply chain. “Most of our components are still imported from China. If the dollar rises, it is certainly heavy, more or less heavy,” he concluded.