Honda Aims 60% Market Share of Indonesian Two Wheeler Market

According to news reported by Reuters, Honda Motor Corporation of Japan, aims to increase its market share in Indonesian two wheeler market to 60% in the next few years. On the back of achieving this market share, it has expanded its annual output capacity to 4.3 million units in this July from 3.5 million units at the end of last year. In the year 2010, Astra Honda (50-50 joint venture between Honda Motor Corporation Japan and Astra International of Indonesia) sold 3.42 million units in the total market of 7.6 million which gave it market share of 42.77% for the year 2010. The current expansion will help Astra Honda to achieve 53% market share of Indonesian two wheeler market which is expected to clock 8.1 million units for the year 2011.

Commenting on the Honda’s ambitious target Yusuke Hori, president director of PT Astra Honda Motor said that the company is expecting the demand to grow continuously and to reach 10 million units within the decade and by that time the company wants to have 60% market share. He also added that to pace up with demand the company needs to expand its production facilities in less than two years down the line and the company can produce more than 5 million units with full overtime usage of current production facilities.

Yusuke Hori was appointed by Honda Motor Corporation back in April 2010 to Head Astra Honda operations. The appointment was a result of Yamaha’s leadership in Indonesian two wheeler market for few months in the beginning of 2010 which was result of expansion in market share of automatic transmission models from 4% in 2005 to 45% in the 2010.

Currently, Astra Honda has 1.2 % more market share compare to its arch rival Yamaha Motor Corporation of Japan (Yamaha Indonesia Motor Mfg. in Indonesia) which has more than 41.50% market share of Indonesian two wheeler market. Astra Honda has expanded its production facilities as it was being the main reason of lagging behind Yamaha for few months.

Indonesia is world’s third largest two wheeler market after India and China. It has continuously grown at double digit rate from past few years and is expected to grow at the rate of 15% for next few years. India’s TVS Motor and Bajaj Auto is targeting to expand aggressively in this market but currently both the companies have negligible market share in Indonesian two wheeler market.

– Mahavir Kothari