Sigit Kumala, Head of the Commercial Department at AISI, is optimistic about rising shipments of motorcycles from manufacturers or distributors to dealers in 2018 for a number of reasons. Firstly, the Indonesian government said it will not raise electricity tariffs in 2018 (after a series of hikes in the first half of 2017), while it also promised not to adjust fuel prices in the first quarter of 2018. This would boost people's purchasing power and therefore people may decide to purchase a motorcycle.

Secondly, Indonesia's macroeconomic conditions are solid. Economic growth is expected to accelerate further, inflation is relatively low, while the central bank's interest rate environment is low (hence it is more affordable to obtain a loan to finance the purchase of a motorcycle).

AISI's modest positive outlook for motorcycle sales in 2018 is in stark contrast to the association's original outlook for motorcycle sales in 2017. It originally targeted a 20 percent (y/y) increase in motorcycle sales in Indonesia last year, but at the end of the year sales had actually fallen as consumer purchasing power remained bleak across Southeast Asia's largest economy.

Therefore, the association became more careful when setting targets for 2018. Drastic decisions by the government or central bank, such as interest rate hikes or fuel hikes, can easily put pressure on motorcycle sales in 2018.

Motorcycle Sales in Indonesia:

    2012     2013     2014     2015     2016     2017
7,064,457 7,743,879 7,867,195 6,480,155 5,931,285 5,886,103

Sources: AISI & Astra International

Motorcycle Sales in Indonesia:

Brand     2016     2017 Market Share
Honda 4,380,888 4,385,888       74.5%
Kawasaki   97,622   78,637        1.3%
Suzuki   56,824   72,191        1.2%
TVS    1,873    1,176        0.0%
Yamaha 1,394,078 1,348,211       22.9%
Total 5,931,285 5,886,103      100.0%

Source: AISI