Jakarta. Indonesia motorcycle sales contracted 8.4 percent in 2016 with manufacturers missing sales targets as consumer's purchasing power remained weak.
It is the second consecutive year sales declined in an industry which had been tipped to benefit from the growing Indonesian middle class.
More than 5.93 million two wheelers were sold last year, compared to 6.48 million a year earlier according to date from Indonesian Motorcycle Industry Association (AISI). While weaker sales had been expected early in the year, the actual figure still fell short of the association targets of 6 million.
"The weakening of purchasing power was felt very early in 2016. This makes it difficult to sell motorcycles," Sigid Kumala, AISI's deputy chairman for commercial affairs, said on Tuesday (10/01).
Japanese manufacturer Honda remains market leader with a market share of 74 percent. Yamaha came second with 23 percent market share, followed by Kawasaki (1.6 percent), Suzuki (1 percent) and other smaller manufacturers.
Exports, on the other hand, grew 39 percent to 284,000 units last year up from 203,000 in 2015.
This year, AISI is yet to revise its modest domestic sales target at between 6.1 million to 6.2 million units, Sigit said, which banks on a hope of economic recovery that should boost consumer purchasing power.
The government has tipped Indonesia's economy to expand 5.2 percent this year, up from an estimated 5 percent last year.
Still, manufacturers began the year with a pessimistic tone after the government issued a new regulation increasing fees on vehicle registration.
"It is definitely felt by consumers. We just hope later in the year the government would not add complications to our business," he said.
Sigit said AISI would wait for first quarter sales report before revising its sales target.