Update COVID-19 in Indonesia: 365,240 confirmed infections, 12,617 deaths (19 October 2020)
19 October 2020 (closed)
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While car sales are showing a rebound in Indonesia, motorcycle sales continue to decline. Based on the latest data from the Indonesian Motorcycle Industry Association (AISI), motorcycle sales in Southeast Asia's largest economy fell 15.9 percent year-on-year (y/y) to 473,896 units in March 2017 from 563,341 units in the same month one year earlier. AISI Chairman Sigit Kumala says Indonesian consumers continue to postpone the purchase of a motorcycle amid weak consumer purchasing power.
Despite improving macroeconomic conditions of Indonesia (namely accelerating economic growth, low inflation, and a stable rupiah exchange rate), the country's motorcycle sales fail to improve accordingly. Car sales, on the contrary, have shown a rebound and therefore it is a necessary to find an explanation why Indonesia's motorcycle sales continue to drop.
Kumala says Indonesia's improving macroeconomic picture, not the least caused by recently rising commodity prices, managed to boost the consumer purchasing power of the nation's higher middle class and elite (these groups are the ones that purchase four-wheeled vehicles). However, the bottom half of the country's middle class is yet to see their purchasing power improve and therefore are still reluctant to buy a motorcycle. This group has to prioritize basic needs such as food, clothes and housing.
Of the five companies that assemble motorcycles domestically only Suzuki Indomobil Sales posted improving figures. Suzuki motorcycle sales grew 69.12 percent (y/y) to 8,600 units in March 2017. Its success is attributed to the launch of new units in the sport and underbone segments. However, overall, Suzuki Indomobil Sales still detects a negative trend in Indonesia's motorcycle sector so far this year.
In the first quarter of 2017 Indonesia's motorcycle sales fell 6.7 percent (y/y) to 1.40 million units. However, for the moment AISI remains optimistic that the nation's motorcycle sales can reach 6 million units in full-year 2017, a modest improvement from 5.93 million sold motorcycles in 2016. Earlier AISI had a target of 6.2 million motorcycle sales in Indonesia in 2017. However, it revised its target after reports of failed harvests and the higher administrative costs involved in the registration of new vehicles.
Indonesian Motorcycle Sales:
¹ Q1-2017 only
Sources: AISI & Astra International