Indonesia world’s third largest two wheeler market has seen steep fall in its two wheeler volume for the month of June 2012. Total two wheeler sales stood at 5,50,468 units in June 2012 down by 16.45% compared to 6,58,817 units sold in the month of June 2012 as reported by Indonesian Motorcycle Industry Association (AISI). This is by far the lowest sales figure for a particular month in the year 2012. It is down by 11.15% month on month basis which is a huge fall. There were total 6,19,540 units of two wheeler sold in the month of May 2012.
The reason of steep fall in Indonesian two wheeler sales is because of the new down payment scheme. Effective from June 16th 2012, two wheeler buyers are required to make minimum down payment of 25% which was earlier 10%. Indonesian government has taken this step to prevent unnecessary auto loan bubbles in the economy. This has affected buyers sentiment as around 80% of two wheelers are sold on loans. We can see similar kind of situation in Sri Lankan two wheeler industry where government has imposed 60-100% import duty on two wheelers import to reduce oil consumption in the country by reducing its import bill.
Indonesian two wheeler industry has seen negative growth this year for the first six months, total of 3.74 million units sold for the period of January to June 2012 down by 8.12% compared to 4.07 million units sold in January to June 2011 period. As predicted earlier the sales for the entire year 2012 will be in range of 7.5 -7.7 million units. It may come down or go up depending upon how the government will act to drive the sales from now onwards. This will majorly affect world’s two wheeler giants Honda and Yamaha as they both command 93% market share of Indonesian two wheeler industry and Indonesia represent lion’s share of their global two wheeler sales.
2012 seems to be most difficult year for the world’s two wheeler market after a decade of healthy growth. India, world’s second largest two wheeler market is also seeing large dip in growth compared to last year. The situation in China, the world’s largest two wheeler market is also not encouraging enough. It seems that we will see flat or low single digit growth in world’s two wheeler market for the year 2012.
-Mahavir Kothari
Note: AISI has reported two different figures for the month of May 2012. Last month, it reported 6,11,251 whereas this month it has reported 6,19,540 units.
