Motorcycle Sales in Indonesia Should Rebound in 2017
The Indonesian Motorcycle Industry Association (AISI) expects Indonesia's motorcycle sales to rebound in 2017. Based on the latest estimates, sales of two-wheelers will rise 10 percent (y/y) to 6.6 million next year from an estimated 6 million vehicles in 2016. This year sales are expected to drop slightly over 7 percent (y/y) compared to 6.48 million sold motorcycles in 2015. AISI Chairman Gunadi Sindhuwinata said there are several reasons that should cause rebounding motorcycle sales next year.
The two main reasons are Indonesia's accelerated macroeconomic growth and people's rising purchasing power. After the economic slowdown in the years 2011 - 2015 the Indonesian economy is forecast to accelerate by around 5.3 percent (y/y) in 2017 (from an expected 5.0 percent in 2016 and 4.79 percent in 2015). In line with accelerated economic growth as well as low inflation (in the range of 3 - 4 percent y/y) people's purchasing power and consumer confidence will strengthen hence resulting in more purchases of various goods and property. Commodity prices have also rebounded in recent months but whether this rebound can persist into 2017 is uncertain.
In the first nine months of 2016, motorcycle sales in Indonesia fell 10 percent (y/y) to 4.35 million units from 4.82 sold units in the same period one year earlier as people are still not confident in their financial situations. Similar to car sales (and home sales), motorcycle sales are a good indicator to measure the state of purchasing power and consumer confidence. In uncertain times consumers prioritize the basic needs and therefore postpone the purchase of a motorcycle.
Exports of motorcycles, on the other hand, have surged sharply so far this year. In the first nine months of 2016 Indonesia exported 300,000 motorcycle units (mostly scooters), up a whopping 500 percent (y/y) compared to motorcycle exports from Indonesia in the same period one year earlier. Indonesia's main export markets for the three-wheelers are Germany and the Philippines.
Before the end of the year, Indonesia's motorcycle sales can still get a lift. Between 2-6 November 2016 the Indonesia Motorcycle Show will be held in Jakarta (Jakarta Convention Center), organized by AISI. This event is held once every two years. In 2014 it managed to boost motorcycle sales by IDR 35 billion (approx. USD $2.7 million). AISI Chairman Gunadi Sindhuwinata expects a better performance in 2016 as several new motorcycle models will be launched at the event.
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