Unreliable public transport, congested roads and a booming middle class make populous Indonesia one of the world’s largest motorcycle markets, and Japan’s Honda Motor wants a bigger slice of the pie.
With sales dropping in Europe and the US in recent years, Honda is eyeing a 60 percent stake in Indonesia’s market over the next decade, revving up the competition with its biggest rival, Yamaha.
“The potential demand for motorcycles in Indonesia is huge, and we’ll keep increasing production in line with consumers’ purchasing power,” Indonesia’s Astra Honda Motor communication head Kristanto said.
Honda and Yamaha are almost neck-and-neck. Honda served 46 percent of the market last year with 3.4 million sales units, and Yamaha served 45 percent at 3.3 million units. Together they supply almost 90 percent of demand.
Honda is hungry to capture 52 percent of the expected 8.2 million units this year, Kristanto said.
Yamaha is keeping cool despite Honda’s ambitions, with sales forecast to jump 6.3 percent this year.
“We are not going to worry. We’ll do our best and focus on our own strategy, especially giving customers the best service,” Yamaha Motor Kencana Indonesia spokesman Eko Prabowo said.
Automakers have been keen to tap the growing motorcycle market in Southeast Asia’s biggest economy, which has 240 million people. Indonesia’s motorcycle market is the world’s third-biggest after China and India.
National annual growth of private vehicle ownership has averaged 11 percent to 13 percent for the past decade, well above other developed countries, according to the University of Gadjah Mada.
“Daihatsu, Toyota, Nissan, they all want to have production plants here,” Indonesian Trade Minister Hatta Rajasa said.
However, Indonesia’s growing middle class is demanding far more motorcycles than cars — car sales last year topped 700,000, while motorcycle sales surpassed 7 million.
The average income for Indonesians has risen from US$650 in 2000 to about US$3,000 today, according to UN data.
“And with small loans available, a person can take home a motorcycle for only 500,000 rupiah [US$55] for the first installment,” Bahana Securities analyst Pandu Anugrah said.
As more remote parts of the Indonesian archipelago develop, motorcycles are more common outside the densely populated Java island, where around two-thirds of the population live.
“Because of a boom in commodities, such as palm oil and coal, sales on Borneo island are also growing rapidly,” Anugrah said. “Indonesians also have a strong sense of ownership. So they are proud if they can buy or lease motorcycles of their own.”
Indonesia is one of the fastest-growing economies in the world. Its output expansion is expected to top 6 percent for this year and next.
Despite rapid development, slow progress on transport infrastructure makes commuting in Jakarta unpleasant and inconvenient. Motorcycles and motorcycle taxis, known as ojek, are an affordable alternative to public buses and trains, which often run inconvenient routes and are overcrowded during peak hours.
Poor road planning and management, which has created a persistent traffic problem in Jakarta, costs the economy more than US$3 billion a year, according to the University of Indonesia, and is deterring foreign investment.
Traffic has become a problem for other major cities as well, including Yogyakarta and Surabaya, both on Java — but the country’s curse is Honda’s blessing.
“We’ll keep producing practical transportation as a solution for this problem for people of all levels in this country,” Kristanto said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to