Motorcycle Sales in Indonesia: Down Slightly in 2017, Up in 2018?
Although motorcycle sales in Indonesia fell slightly in 2017, an improvement was detected. Sales fell 0.76 percent year-on-year (y/y) to 5.88 million motorcycle units in 2017, improving from a 8.4 percent (y/y) decline in the preceding year. Meanwhile, the Indonesian Motorcycle Industry Association (AISI) predicts a rebound as it expects growth up to 3 percent (y/y), or around 6 million motorcycles, in 2018.
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 | |
| Motorcycles (units) |
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