Indonesia’s motorcycle market looks resilient in 2026. Following the Q1 4.5% lost, a rapid April recovery (+27.9%) reported the market back on track and year to date April sales have been 2.2 million, up 1.9%. Honda dominates while EVs segment is still in the nursery.
Motorcycle Industry: Trends and Outlook
Indonesia’s motorcycle industry—the third largest in the world—plays a central role in the country’s industrial ecosystem and represents by far the dominant form of individual mobility, with volumes nearly six times larger than the passenger car market.
Following the sharp rebound after the Covid-related production shutdowns in 2020 (with around 90% of motorcycles produced locally), market growth has lost momentum. After a modest +2.1% increase in 2024, the market expanded by just 0.6% in 2025, reaching approximately 6.55 million units—still well below the 8 million-unit peak recorded in the previous decade.
As reported separately, electric motorcycle manufacturers are operating in an increasingly uncertain policy environment. Government incentives introduced in mid-2023 expired in December 2024 and were repeatedly postponed for renewal throughout 2025. Authorities ultimately announced that no new EV incentives will be introduced, creating a highly unstable framework for investment and market development.
The start of 2026 was negative with the first quarter sales ended down 4.5%, due to the very negative March data, when sales fell 17.2% breaking a series of 7 consecutive year-on-year growing months. However, a rapid April recovery (+27.9%) reported the market back on track and year to date April sales have been 2.2 million, up 1.9%.
The more than doubled petrol price hit severely the consumers and this has been immediately reflected in the 2-wheeler industry. Additionally, while in other countries of the region, we can register and increase of electric vehicles demand, this is not the Indonesia case, considering the totally absence of incentives and undermined medium term strategy for the sector.
Yadea Strategic Investment
Despite this policy uncertainty, Chinese EV giant Yadea announced a major investment to manufacture electric scooters and motorcycles in Indonesia. The inaugural vehicle delivery ceremony, held on March 14, 2024, in Cikarang, Bekasi, marked a significant milestone in Yadea’s expansion strategy in Southeast Asia.
Located in Bekasi, West Java, the Yadea Indonesia production base covers 28,000 square meters, featuring state-of-the-art facilities and advanced manufacturing technologies, with an annual production capacity of 300,000 units. This investment underscores Indonesia’s long-term strategic importance for global EV players, even as short-term policy uncertainty continues to weigh on the domestic electric two-wheeler market.
