Indonesia. Following the -6% in Q1, the 2020 Outlook is double-digit negative

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Indonesian Motorcycles market lost 6% in the Q1 2020 mainly due to a deep -18% in January and Q2 sales are projected down near 20%, due to the anti-covid19 measures, before to recover in the second half. The 2019 sales level will be recovered next year.

New Motorcycles Sales were flat in the Q1 2020

The start of 2020 have been negative, following the steady recover shown in recent years, with January losing a deep 18% and steady score in February and March, with the first quarter sales at 1.58 million units reported a 6.0% fall from the correspondent period last year. 

The measures taken by the Government to protect from Covid19 should impact the Q2 sales which are estimated down in a range of 15-20%, while a recovery is expected in the second half with the 2020 outlook negative in double-digit and the 2021 back at the 2019 level. 

In the first quarter Honda led the rank with near the half the sales, followed by Yamaha and a well performing Suzuki.

In the 2019 the market was back at 6.5 million

The Indonesian industrial sector is back almost optimistic with regard to the future of the motorcycles industry and the recovery in place, started in the 2018, could be supported by factual support. 

Last year, the Director of Maritime Industry, Transportation Equipment and Defense Equipment Ministry of Industry (Kemenperin) Putu Juli Ardika, has defined two targets for the industry by the 2025: the achievement of 10 million production and 1 million export. The first target looks unrealistic without specific incentive support to the industry, while the second could be achieved, starting from the current level.

Meantime, total two-wheeled export  in 2019 reached the new record of 810.433 units.

As far as the domestic market, it should grew up near 9 million in the 2025 and we do not believe this realistic.

Indeed, after having closed the first half of the 2019 with 3.25 million (+7.4%), the domestic new motorcycles market ended the 2019 with 6.53 million units, up 1.3% from the previous year.

The 99.9% of sales are with ICE models, while the start of the first local made electric scooters is concentrated in few models and counts less than 20.000 units. The Japanese giants which control the market have not yet released models, a part for the Honda PCX Electric, which is sold just with a lease formula reserved to companies, without an official price list.

Honda CBR1000RR 2019
Honda CBR1000RR 2019

Market Overview & Trend

The Indonesian motorcycles industry is the third in the World since almost twenty years representing the primary private transporting sector for people and goods and having a size 6 time bigger than the automotive industry.

The market hit the record at the end of last decade reaching for the first and lonely time the 8 million units sold in a calendar year. Then the market entered in a mature stage and sales declined progressively, down to the 5.8 million scored in the 2017, the lowest level in the last 15 years, when the increase of fiscal duties have further hit the industry.

However, fueled by a quite positive economic trend, in the 2018 and in the 2019 the market has changed the trend taking a positive path.

The market is dominated by Japanese brands, all producing both for local market and to export (mainly in ASEAN but even in other World’s regions, like South America). 

In 2019, Honda gained 73% of market share followed by Yamaha at 21%. However, in recent years several new brands landed in the country from India, Europe and US and over 30 brands are imported in the country with sales progressively growing. This is not the case of MV Agusta, which has lost the importers in the 2017 for bankrupt and is looking for a new one.

A strong impact is having on the premium segment market the aggressive strategy put in place by KTM supported by the Indian partner (and 48% shareholder) Bajaj Auto. After entering the market in the 2016, the Austrian brand during the 2018 started to supply from the Bajaj Auto’s 100% owned subsidiary PT. Bajaj Indonesia, located in Chakan producing with a CKD system probably aiming to base in Indonesia a hub for the entire region.

At the moment KTM distributes in Indonesia a short line up including the KTM 200 Duke, 250 Duke and the 390 Duke, but increasing the line up the brand should further growth.

During the 2018 Indonesian International Motor Show it was announced the start-up of a new local venture, 100% with Indonesian resources, aiming to boost the electric-powered motorcycles segment. A local enterprise, the PT Wijaya Manufacturing plans to produce 60,000 electric-powered motorcycles in 2019. The company is a collaboration between state-owned enterprise Wijaya Karya Industri dan Konstruksi and private firm Gesits Technologies Indo. Actually Gesits is selling near 1.000 e-scooter per month.

The investments in the low emission vehicles are considered crucial to reduce pollution and to revamp the industry.