Honda determined to maintain motorcycle market domination

The Jakarta Post, Jakarta

Motorcycle manufacturer PT Astra Honda Motor (AHM) is upbeat about retaining its dominance of Indonesia's motorcycle market amid fierce competition from its rivals, particularly Yamaha, by avoiding price hikes and improving technology.

"AHM will focus not only on introducing new products featuring the latest technology into the market, but also on maintaining prices in spite of the recent instability in oil prices," executive vice president director Siswanto Prawiroatmodjo told a press briefing Friday.

He was speaking during a ceremony to mark the rolling off the assembly line of the company's 20 millionth motorcycle at its Cikarang factory, West Java.

While high oil prices have increased production costs in many industries, including the motorcycle industry, Siswanto was optimistic that AHM would be able to keep prices steady by improving efficiency in both production and distribution.

AHM is currently increasing its production capacity in order to meet its target of producing 2,150,000 motorcycles by the end of this year. At present, it has three plants in Greater Jakarta with a total capacity of some 10,000 motorcycles per day.

Budi Dharmadi, the Industry Ministry's director general of transportation equipment and telematics, who attended the ceremony, said he had urged AHM to increase production capacity to meet Indonesia's demand for motorcycles.

Budi predicted that demand next year would hit the five-million mark, up 400,000 from the 4.6 million forecast for this year.

He said he hoped that AHM would soon start exporting its motorcycles as, he said, "AHM has achieved the status of being the largest motorcycle producer in Asia and this should be considered an opportunity for expanding into the export market."

AHM has been the country's motorcycle-market leader for 36 years, and currently controls about 46 percent of the market.

However, aggressive campaigns and the introduction of new models have seen Yamaha closing the gap with Honda. In fact, Yamaha beat Honda twice this year in monthly sales.

Yamaha became the market leader in March by selling 159,035 motorcycles compared with Honda's 151,074, and in July sold 161,016 compared with Honda's 143,223.

However, during the first 10 months of the year, AHM was on top with sales of 1,707,339 motorcycles compared with 1,522,422 for Yamaha. (dic)