Indonesia May Two Wheeler Sales Down by 13.5%B

Indonesia, world’s third largest two wheeler market after China and India has seen steep fall in May month two wheeler sales.  Total two wheeler sales stood at 6,11,251 units in May 2012 down by 13.5% compared to 7,06,293 units sold in the May 2011 as reported by Indonesian motorcycle industry association (AISI). It is also down by 1% month on month basis. There were total 6,17,508 units sold in the month of April 2012.

The reason of steep fall is because of the new down payment requirement for auto purchases which come into effect on June 15. The Indonesian government has taken the steps to limit the size of housing and auto loans to prevent the loan bubbles in the economy. This has severely affected the world’s two wheeler giant Honda and Yamaha which commands more than 93% share of Indonesian two wheeler industry. Last year Honda sold 4.28 million units while Yamaha sold 3.15 million units in Indonesian two wheeler market.

The May month figure is alarming sign for Indonesian motorcycle industry association (AISI) which has set target of 9 million units for the year 2012. It seems that the sales will continue to be affected due to new credit policy and will not revive until government will take corrective actions. We may see total sales of around 7.5 -7.7 million units for the entire year which is down by 4-6% compared to 8 million units sold last year. This can affect Yamaha and Honda’s global sales projection since Indonesia accounts lion’s share of their global two wheeler sales.

-Mahavir Kothari