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Jakarta Post

Collusion verdict to have little impact on motorcycle makers

  • Tassia Sipahutar
    Tassia Sipahutar

    The Jakarta Post

Jakarta   /   Thu, February 23, 2017   /  04:44 pm
Collusion verdict to have little impact on motorcycle makers A man works at a Honda motorcycle plant. (Tribunnews/.)

The recent verdict by the Business Competition Supervisory Commission (KPPU) that the two largest motorcycle manufacturers colluded to fix prices will have a limited impact on competition and growth in the industry, Fitch Ratings said in a statement issued on Thursday.

The KPPU announced on Monday that PT Yamaha Indonesia Motor Manufacturing (YIMM) and PT Astra Honda Motor (AHM) had engaged in cartel practices in the sales of 110 cc and 125 cc automatic scooters by marking up the vehicles' prices.

“We expect the verdict to have a minimal impact on the market shares of AHM and YIMM, which dominate the Indonesian motorcycle market,” Fitch says.

(Read also: Court digs into alleged Astra-Yamaha cartel)

Data from the Indonesian Motorcycle Industry Association shows that AHM's Honda brand was the best-selling motorcycle brand in Indonesia in 2016 with more than 4.3 million units sold, making up 74 percent of the market.

YIMM's Yamaha came in the second place with nearly 1.4 million units sold in 2016 or 24 percent of the market.

“A sudden large shift in demand to other brands is unlikely, although the verdict carries an element of reputational risk. The other competitors in Indonesia have limited product offerings or concentrate on different segments.”

According to Fitch, the decision is also unlikely to affect short-term growth of the motorcycle industry. It projects that the outlook for the Indonesian auto industry in 2017 is stable, with modest growth in auto sales, supported by the introduction of new products, a low interest-rate environment and underdeveloped public transportation. (tas)