Motorcycle sales in Indonesia posted a strong gain in the first half this year, as purchasing power has recovered, giving manufacturers hope to rebound from a four-year-long slump.

The sales reached 3.3 million units between January and June, up 13 percent from 2.9 million in the same period last year, the Indonesian Motorcycle Industry Association (AISI) data showed. Manufacturers saw a full-year sales drop of about a quarter to 5.9 million units in 2017, from 7.8 million in 2014.

"There aren`t many new models being released, [so the increase] is more about an improvement in purchasing power, as commodity prices have stabilized and there are no spikes in the general price level," AISI deputy chairman for commercial affairs Sigit Kumala said on Sunday (08/07).

Inflation has been tame this year, as the government managed to control food prices and increased fuel subsidies to keep gasoline and diesel prices stable. Despite the Idul Fitri celebrations, inflation in June slowed to 3.12 percent from 3.22 percent a month earlier.

Additionally, there were no regulatory changes that would deter customers from buying new vehicles this year, Sigit said. In 2017, the government doubled the cost to register vehicles.

The country`s massive infrastructure development has also encouraged people to invest more in conveyance.

Honda remains the market`s leader with a 70.5 percent market share, followed by Yamaha with 25.8 percent. Suzuki, Kawasaki and TVS followed with market shares of 1.6 percent, 1.4 percent and 0.5 percent respectively.

Despite the first half`s growth in sales, AISI refrains from revising its sales growth target of between 3 percent and 4 percent this year.

"We don`t want to hurry because we`re still watching developments in the second half. There is still the impact of the [United States-China] trade war on export materials. We still don`t know how it would affect things," Sigit said.

With the trade war between the United States and China, the rupiah continues to weaken, while interest rates have been on the rise, increasing operations and raw material costs.

By Jakarta Globe(Published: 09/07/2018)

http://jakartaglobe.id/business/motorcycle-sales-rise-1st-half/

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