Indonesia’s sales and exports of motorcycles fell by double digits in March, compared to the same month last year, but the Association of Indonesia Motorcycle Industry expects sales to increase by up to 7% this year, to 5.4 million units.
In March, domestic sales dropped by 16% to 450,565 units and exports slumped by 21% to 54,865 units, compared to the same month last year, according to data released by the association.
Scooters made up 88% of sales, followed by 6% each for sports motorcycles and underbone cycles. The latter are smaller motorcycles built with tubular framing overlaid by plastic or other non-structural parts, as opposed to larger models with frames of pressed steel. For exports, the market share for scooters was 70%, sports bikes was 20% and underbone motorcycles 10%, almost unchanged year over year.
The association said last November that it expects motorcycle sales to reach between 5.1 million to 5.4 million units and expects export demand to increase by 10% to 20 % in 2022. However, it added that domestic demand may be dampened due to an increase in the country’s value-added tax rate, which rose to 11% from 10% on April 1. VAT will increase to 12% by January 1, 2025. VAT for used motorized vehicles increased to 1.1% on April 1 and will increase to 1.2% on January 1, 2025.
Total domestic sales of motorcycles in 2021 jumped 38% to 5.1 million units, compared to the previous year, the peak of Indonesia’s COVID-19 pandemic. Exports increased 15% to 803,931 units. The majority were scooters, followed by sports and underbone motorcycles.
The German-Indonesia Chamber of Industry and Commerce said that Indonesia is the third-largest market for two-wheelers behind China and India. Indonesia’s sales are expected to reach more than 6 million in 2026, according to Statista, a data information provider.