Wahana Artha Group, a major dealer of Honda motorcycles, is looking to the eastern part of Indonesia to spur growth amid flat business in Jakarta and Tangerang.

Jakarta and Tangerang are currently its largest markets and the group controls 70 percent share, but sales have remained largely stagnant over the course of several years, said chief financial officer Taufik Aulia during a recent visit to The Jakarta Post.

Data from the group show that Honda motorcycle sales hovered at about 400,000 units a year in the two areas over the past three years. In 2017, it hopes to increase the volume by 3,000 units only.

“The markets [in Jakarta and Tangerang] are pretty much already saturated. In the past, we could post between 30 percent and 40 percent annual growth, but now, we would be very happy to book a 5 percent growth,”
he said.

The group says it only relies on repeat orders from existing customers in Jakarta and Tangerang and claims that such stagnant development was predictable.

As a solution, Taufik said it was looking to open several retail sales branch offices in the east, such as in Gorontalo.

Retail sales are currently managed by its unit, PT Wahana Artha Ritelindo. (WARI). At present, WARI operates 25 branches and three outlets, including in Kupang, East Nusa Tenggara, and Kotamobagu, North Sulawesi.

“That [eastern region] is where the growth prospects are. The markets are not as dense as in the western region, considering the small motorcycle-ownership ratio there. The amount of investments needed to open new branches is not as high either,” said Ario, the marketing head of PT Wahana Makmur Sejati (WMS).

WMS is the group’s arm in the Honda dealership business segment.

Data from the Indonesian Motorcycle Industry Association (AISI) show that nationwide motorcycle sales had continued their downward trend with a 7.8 percent annual drop from January to November last year.

The group was founded in 1972 by Mohammad Teddy Thohir, Yanto Kasiman and Susianty Pranata. Its current board of commissioners is headed by businessman Garibaldi Thohir, widely known for his role as president of coal mining company PT Adaro Energy.

In addition to the motorcycle dealership, Wahana Artha also runs several other business segments, namely motorcycle financing through the publicly listed PT WOM Finance, logistics through PT Tristar Transindo, food and beverages through PT Sahari Multi Investama, which oversees Kyochon restaurants, and hospitality with the operations of the Santika, Amaris and Yello hotels.

It set a revenue target of Rp 6.1 trillion (US$457.65 million) in 2017, a slight increase of 5.2 percent compared to 2016. A majority of the figure will still come from the motorcycle business with
91 percent.

In terms of bottom line, Taufik said it was expecting a decline to Rp 75 billion by year-end from Rp 100 billion in 2016.

“We are in the midst of several expansions that surely need costs. We are going to build two new warehouses and several new showrooms,” he said.(ecn)

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