Green Low Cost Cars Flood, Indonesian Motorcycle Industry Association Reduce The Target In 2016

Commercial Department of Indonesian Motorcycle Industry Association (AISI), Sigit Kumala stated the plan to reduce the target of motorcycle production this year, lower than the previous period 2015. Sigit said this is the realistic decision looking to the sluggish market  of motorcycle sales compared to the previous period last year. In 2016,AISI is  pressed into the production  as many as 6,250 million units lower than realization of last year which is around 6.708 million units. Initially AISI estimates total distribution this year will stagnate or equal to the achievements of last year. For domestic market, they revised target of 6.5 million units to 6 million units.

The revision is urgently made after the sales performance in the first half / 2016 is bad enough. Distribution of export and domestic markets in the first half / 2016 just as much as 3.11 million units, down 4.8% from the achievements of the first half / 2015 around 3.26 million units.

The option to reduce the production is the ultimate solution looking the fact of first semester sales far below the target around only 5924 unit. This is the most logical mathematics calculation to avoid over production. Indonesian Kawasaki Motor Marketing in chief, Michael Tjandra also has the same perspective. Kawasaki itself experienced the decrease of total sales this year around 2541 units compared to the previous period. Furthermore for retail sales, the company has the total 30% margin of decrease. 

The sluggish market of motorcycle in the country is basically caused by the global economy slowdown. Indonesia also is being influenced especially the commodity price that remain stagnant outside java area. The economy growth of first quarter of the country was also disappointingly far from expectation. It only reached around 4.9% below the ideal standard. The distributes impact on investment and people buying power. 

On the otherhand, the car automotive made a break through to produce massive green low cost cars that pervade into national market. Suzuki, Toyota and Honda have launched LCGC that harassed the motorcycle segment. The easiness provided by these 3 car producers make the customers shift to use accommodated cars. Thus the market segment of motor cycle becomes smaller then previous period. The car industry continues to massively disrupt motorcycle market segment. Lately, toyota is to release the new LCGC calya that is a little bit more expensive than its predecessor agya. 

Some economy analyst consider this as serious threat to motor cycle industry for long period. This can be the initial stultification of motor factories. 

The revision of motorcycle sales target this year is definitely an mathematics most logical option. In the midst of economy slowdown, the automotive industry has to adjust to avoid the loss of over production. Meanwhile another perspective predicts the initial hint of motorcycle industry of the country.