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Market Research Report

Indonesia Two Wheelers Market Outlook 2019-2035: Growth Opportunities | COVID-19 Impact Analysis

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Indonesia Two Wheelers Market Outlook, 2019-2035 Market Landscape/ Overview

Indonesian two wheelers mainly motorcycles in the 2019 is again in the positive track, despite in October and November sales declines, with full year projected near the 6.5 million units. The Government drew up two targets for the 2035, the 10 million units produced and the 1 million units exported. In the long term, there will be a strong demand for dedicated scooter designs catering to different business use segments, including high range, fast charging, built-in cold chain storage and smart maintenance capabilities for e-bikes.

Market Segmentation

By Vehicle Type 

  • Motorcycle
  • Scooters 
  • Mopeds
  • Electric Two Wheelers

By Sales Type

  • Individual 
  • Institutional

By Region 

  • Java {Market Share (%), Market Size (USD Billion), Sales (Million Units)}
  • Sumatra {Market Share (%), Market Size (USD Billion), Sales (Million Units)}
  • Kalimantan {Market Share (%), Market Size (USD Billion), Sales (Million Units)}
  • Sulawesi {Market Share (%), Market Size (USD Billion), Sales (Million Units)}
  • Bali and Nusa Tenggara {Market Share (%), Market Size (USD Billion), Sales (Million Units)}
  • Maluku {Market Share (%), Market Size (USD Billion), Sales (Million Units)}

Economic Environment

Indonesian economy likely continued expanding close to 5% in the fourth quarter, with 100 basis points of rate cuts since June supporting domestic activity. In October, retail sales were up, while tourist arrivals grew at a healthy pace following Q3. Moreover, government import substitution policies to limit the current account deficit likely supported the external sector’s contribution to growth. 
Economic growth is seen fairly steady next year. While fixed investment is seen gaining momentum on tax incentives and greater infrastructure spending, this will be counterbalanced by a rebound in imports, which will weigh on the external sector. A rise in global trade tensions and a slowdown in China pose downside risks.

2019 Market at a glance

The Indonesian industrial sector is back almost optimistic with regard to the future of the two wheeler industry and the recovery in place, started in the 2018, could be supported by factual support. In a recent speak, the Director of Maritime Industry, Transportation Equipment and Defense Equipment Ministry of Industry (Kemenperin) Putu Juli Ardika, has defined two new targets for the industry by the 2025: the achievement of 10 million production and 1 million export.

Indeed, total exports of two-wheeled vehicles during January-October 2019 reached 682.325 units and can end the year over the 0.8 million units.
As far as the domestic market, it should grew up near 9.70 million in the 2035, from the near 6.5 million projected for the full 2019.Indeed, after having closed the first half of the 2019 with 3.25 million (+7.4%), in the second half sales keep growing slower and at the end of November reached the 6.17 million units (+3.2%) with both October and November in negative territory. The market entered in a mature stage and sales declined progressively, down to the 5.8 million in the 2017, the lowest level in the last 15 years, when the increase of fiscal duties have further hit the industry.
However, fueled by a quite positive economic trend, in the 2018 the market has changed the trend taking a positive path and sales finally were back over 6 million units ending the year at 6.38 million sales, up 8.4%.

Market Dynamics (Market Drivers and Restraints, Consumer Trends)

The major factor driving the Indonesia Two Wheeler market is rising demand for Two Wheeler taxis in the country, the companies like Uber, Grab and Go-Jerk are the prominent players of Two Wheeler taxi market in the Indonesia.
Two-and-Three-wheeler mobility depends on affordability, maneuverability, and door-to-door accessibility. In middle and low-income cities, two and-three-wheelers offer significantly cheaper and faster travel compared to public transport. However, in middle and low-income countries, they contribute a significant share in total emissions. They also grow faster than other modes of transport.

Many cities have considered or already implemented bans on two-and-three-wheelers because of traffic congestion and road accidents. Motorcycles also pose a threat to public safety as they are involved in a considerable share of urban crime. The cities of Guangzhou, Shenzhen, and Dongguan for instance banned motorcycles and two wheelers as part of a crime prevention strategy. Research indicates that more than 168 Chinese cities have implemented such bans thus far. Numerous cities in Asia such as Jakarta, Kuala Lumpur, Yangon, Indonesia and Hanoi have since followed this example. However, private cars carrying only one passenger are expected to cause the highest external costs within urban areas. Cars should thus be the starting point for restrictions as all alternative travel and transport modes available to former drivers would be more efficient than their previous travel mode. The mere banning of two-and-three-wheelers as a bullet policy instrument could have serious rebound effects. Cities may need to determine specific set of circumstances where appropriate two-and-three-wheeler restriction will have a net aggregate positive impact.


Ideally, the introduction of new technologies to two and-three-wheelers should neither be accompanied by the promotion of nor a ban of specific technologies. This can only be achieved by middle and low-income countries with technology forcing fuel-neutral standards for fuel efficiency and emissions with due consideration of external costs. For the past two decades, policymakers have tried to set regulatory standards for two-and three-wheelers without committing to specific winning technologies. In the long run, this has ensured a future lock-in of technological developments into specific paths, discouraging investments in alternative, potentially more efficient technologies. The results of a cost benefit analysis among various technologies indicate that electric two-and-three-wheelers48 can provide a maximum in social benefits among all other available technologies.

Geographical Market (Dominate Market, Target Opportunities, etc)

  • The exports of automotive components increased 13 times from 6.2 million components in 2016 to 81 million components in 2017.Java represents 70% of the national new vehicle sales, including 24% in the Jakarta province alone. The entirety of the automotive activity in the country is concentrated upon West Java and Jakarta .
  • The Indonesian market is very attractive. Indonesia has the largest population among the South East Asian countries. 1 out of every 10 Indonesian has a motorcycle. Indonesia's public transport is not too good either. Availability of credit of has made considerable improvement in the country and there is room for ample growth. The public of Indonesia is not happy with the entry of chinese market. This affected the critical areas of after sales service and spares support. The largest of them has a market share of less than 2 percent.The Indonesian customers would be wary of the quality of two wheelers from the Indian Manufacturers, now it is upto TVS and Bajaj to build their brand in the market.
  • The manufacturers together, repulsed an earlier attack (1999-2002) by almost 80 Chinese companies that were exporting bikes to Indonesia. The Chinese came in strength after the Indonesian government opened the market, but did not set up a manufacturing base in Indonesia. They used surplus capacities back home and pushed CBUs (Completely Built Units) into Indonesia. Their pricing was at least 20 per cent cheaper than domestic manufacturers. In 2001, they notched up a 15 per cent market share, and tried every trick in the book to grab more imports and flooding the market.
  • There are successful Japanese companies who are having joint venture with the local companies and are sharing profits too. In 2018, 6.38 million units were sold upto 8.4% from the previous year. Indonesia’s automobile market has larger room for market expansion, compared to Asian neighbors such as Thailand and Malaysia.
  • Merger & Acquisition Activities
  • Exxon Mobile has recently announced that it agreed to purchase PT Fedral Karyatama, one of Indonesia’s largest manufacturers and marketers of motorcycle lubricants to enable the expansion in the international market. The acquisition includes the Federal Oil brand and a 700,000 barrel per year blending plant in Cilegon, Indonesia. Exxon Mobile will acquire 100% interest in the company and the transaction was closed in 2018.The company was founded in 1988,FKT is one of Indonesia’s leading motorcycle lubricant marketers with a nationwide distribution network supported by approximately 40 dealers, 3,200 Federal Oil Centers and more than 10,000 retailers throughout Indonesia.The company has been operating in Indonesia since1979 and have ivested more than 23 billion dollars .The subsidiaries have been operating since120 years.Exxon Mobil has more than 500 employees in Indonesia, 95 % of which are Indonesian.
  • Players Specific Data (Product Launch, international or domestic players dominance, Sales Distribution, etc)
  • Latest News about Product Launch:

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Yamaha will launch a new scooter in Indonesia which is 125 cc Mio S which would be easy to handle and catering to the young women buyers. They are trying to expand their product base in the country like Indonesia for their future. The company is doing good and earning decent revenue from its sales.
Honda launched its new Genio  is powered by the latest 110 cc SOHC eSP engine with PGM-FI injection fuel system. The Genio has a maximum speed of 94kph. Honda claims the Euro 3 Genio with the eSP engine technology is very fuel efficient. Based on the internal test using ECE R40 method, the fuel consumption of this model is 59.1 km/litre (ISS feature on) enabling it travel 248km in one tankful.The engine performance is supported by new frame eSAF technology from Honda which has been applied for the first time for a two-wheeled vehicle in Indonesia. This frame uses the latest production process such as press and laser welding process. The structure is developed to increase handling stability, so the Genio becomes easy to ride, light, and comfortable to manoeuvre. This new frame can even provide a more efficient space utilisation proven by the 14-litre luggage box and 42-litre fuel tank capacity.

Yamaha Motor Co has launched the new Free Go family-oriented 125cc scooter in the Indonesian market. The free go is manufactured and marketed by group company PT Yamaha Indonesia Motor Manufacturing (YIMM). The company is targeting sales of over 100,000 units in the first year of sales.
Latest news declared that the Astra Honda Motor, the sole manufacturer and distributor of Honda motorcycles in Indonesia has started to export two types of motorcycles to the Philippines. They chose Philippines as the export destination which is much more similar like Indonesia in terms of geographic and demographics. They are able to meet the Indonesian demand and also wanting to expand their product base by launching their products overseas. The motorcycles (New Honda Beat ESP CW and All New Honda Beat ESP CBS ISS) which have been shipped are manufactured at the Indonesian plant in West Java. It is of belief that the products would be accepted by the people and it proves that the Indonesian products would be of good quality.

International and domestic player dominance:

  • The market is dominated by Japanese brands with Honda holding 73% of market share (in 2018) and Yamaha at 21%. However, in recent years several new brands landed in the country from India, Europe and US and over 30 brands are imported in the country with sales progressively growing. 
  • A strong impact is having on the premium segment market the aggressive strategy put in place supported by the Indian partner (and 48% shareholder) Bajaj Auto. After entering the market in the 2016, the Austrian brand during the 2018 started to supply from the Bajaj Auto’s 100% owned subsidiary PT. Bajaj Indonesia, located in Chakan producing with a CKD system probably aiming to base in Indonesia a hub for the entire region.
  • At the moment KTM distributes in Indonesia a short line up including the KTM 200 Duke, 250 Duke and the 390 Duke, but increasing the line up the brand should further growth. During the 2018 Indonesian International Motor Show it was announced the start-up of a new local venture, 100% with Indonesian resources, aiming to boost the electric-powered motorcycles segment. A local enterprise, the PT Wijaya Manufacturing plans to produce 60,000 electric-powered motorcycles in 2019. The company is a collaboration between state-owned enterprise Wijaya Karya Industri dan Konstruksi and private firm Gesits Technologies Indo. Actually Gesits is selling near 1.000 e-scooter per month.
  • The investments in the low emission vehicles are considered crucial to reduce pollution and to revamp the industry.

Competitive Landscape:

Indonesian two wheeler market is observed to be highly fragmented with the presence of large number of local dealers, mechanics and distributors and sellers. There are more or less 750 plus dealers who have an online presence on the online platforms of year 2018.Major online players in the Indonesian market used two wheeler include OLX, Mobil123 which come under this category. There are various factors competing in the online two wheeler market which include price, Marketing and advertising etc.

Reasons to buy this market study

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  • Facilitate decision-making based on strong historic and forecast data for Indonesia Two Wheelers Market
  • Develop strategies based on the latest regulatory framework
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Indonesia Two Wheelers Market Outlook 2019-2035: Growth Opportunities | COVID-19 Impact Analysis

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