TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
2-wheeler sales hit 6.2 million
Easier access to bank loans, coupled with worsening traffic congestion mainly in Greater Jakarta, boosted new motorcycle sales last year by 32 percent
Change Size
Easier access to bank loans, coupled with worsening traffic congestion mainly in Greater Jakarta, boosted new motorcycle sales last year by 32 percent.
Motorcycle sales topped a record 6.21 million units last year as against 4.68 million units in 2007, according to PT Astra International and the Indonesian Motorcycle Industry Association (AISI) Tuesday.
Last year’s sales defied high fuel prices and higher lending interest rates.
The government increased fuel prices nearing the end of the first semester by 28.7 percent on average, pushing up inflation and interest rates to 9.5 percent until early December.
Motorcycle sales are often used to gauge the purchasing power of middle to low-income consumers.
According to AISI, the largest sales were recorded in August last year, when 612,032 new motorcycles hit the street.
Honda once again ruled last year’s market by selling 2.87 million units, or 46 percent of the total market, up from 2.14 million in 2007 or 45 percent of two-wheelers sold.
Closely trailing behind was Yamaha, selling 2.46 million units with a market share of 39 percent. In 2007, Yamaha sold 1.83 million units keeping the same market share.
Four-stroke engine motorcycles with below 125 cylinder capacity are the country’s most popular type due to fuel efficiency, low maintenance costs and being easy to ride.
They are designed to suit the Indonesian average body size and can weave in and out of traffic jams.
Indonesia is the third largest market for motorcycles in the world, after China and India.
The boom in motorcycle sales may end this year as AISI and several motorcycle financing companies have forecast a bleaker outlook given the deepening global economic downturn.
Although Bank Indonesia’s benchmark interest rate is on a declining trend, with the latest cut putting the rate at 8.75 percent, weaker purchasing power could dent demand, which it is estimated may drop by up to 30 percent.
Around 80 percent of motorcycle purchases are financed by loans.
As reported earlier, the Indonesian Financing Company Association (APPI) forecasts its members will disburse a total of around Rp 100 trillion (US$9 billion) worth of loans this year, down from an estimated Rp 135 trillion last year.
“From now on, the problem for us is on the demand side,” APPI chairman Wiwie Kurnia told The Jakarta Post Friday.
Financing companies currently offer customers interest rates of between 18 and 20 percent, according to the association.
Performance of financing companies normally trails closely behind demand for cars and motorcycles, which is expected to plunge as people’s purchasing power is eroded by the impact of the global economic downturn, which is hitting international trade activities.
Last year, 42 percent of finance company loans went to motorcycle buyers, while another 42 percent went to automobiles and 16 percent to heavy machines.
“Loan applications dropped significantly during the last quarter (of last year),” WOM Finance president director Suwandi Wiratno said.
WOM is the financing arm of Bank Internasional Indonesia (BII), which is controlled by Malaysian-based Maybank.
