Indonesia 2021. Honda struggles in a Market losing 17% in the first quarter


Indonesian Motorcycles Industry has been still below expectations in the first quarter 2021, following the worst year in the history. First quarter sales declined 17% with the market leader, Honda sharp declining.

Motorcycles Market Trend 2021

Following the incredible 2020, one of the worst year in the Indonesian motorcycles industry, the new year started with a new very negative quarter, almost data on economy is improving.

Economic activity started to rebound last July, following the easing of containment measures and strong government support, led by government consumption and net exports. Amid uncertainty over the pandemic’s evolution and slow rollout of vaccinations, the recovery is expected to be gradual over the current year.

Policy support and an improving global economy can be the main drivers initially, followed by greater mobility and confidence as the vaccination program advances.

The National Economic Recovery Program aimed at strengthening health care capacity and providing financial support to vulnerable households and businesses. The central bank supported these efforts by purchasing government bonds in the primary market, an exceptional but appropriate and temporary move that has ensured financial market stability. To support this plan, Indonesia temporarily suspended its pre-pandemic budget deficit ceiling of 3 percent of GDP until 2023.

However, the motorcycles industry, one of the largest in the industry and a key driver of export activity is struggling again and in the first quarter sales have been 1.327.000 (-17.1% vs the 2020 and -22.0% vs the 2019).

Market leader is again Honda while losing 23.8%, while the first followed, Yamaha increased sales 4.4% in the quarter. Both Kawasaki and Suzuki lost near 7%.

In 2020. Two-Wheeler market down 43.7%. Honda lost 2 million sales

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 domestic new motorcycles market ended the 2019 with 6.53 million units, up 1.3% from the previous year.

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 the 2020 the Indonesian motorcycles industry was one of the worst worldwide, simultaneously hit by economic recession and covid19.

Starting form the second quarter, the measures taken by the Government to protect from Covid19 have hugely impacted the industry with a delay compared with the rest of the World, in terms of virus spread and market fall, but with similar negative impact on the economy and on consumer goods demand.

While in the rest of the World the markets have partially recovered during the second half, in Indonesia the trend worsened month after month with the Q4 2020 reported down near 50% from the correspondent period in the previous year.

The full year 2020 sales have been 3.7 million, down a deep 43.7%, the lowest level in the last 30 years.

Considering Indonesia is the first market in the World for all Japanese manufacturers, the market fall had severe consequence on the global revenues, sales and profit for the Jap Big4.

Honda, the market leader, fell down 41.2%, losing over 2 million sales!

Yamaha, raked second losing 54.2%, followed by Kawasaki (-34.9%) and Suzuki (-44.7%).

All brands have lost deeply, a part the local electric venture, Gesits, which kept expanding the presence, the network and sales.