Honda launches new models to regain loss in market share

Saturday, August 25, 2007

The Jakarta Post, Jakarta

Motorcycle producer PT Astra Honda Motor (AHM) will launch three new models with more stylish and sporty features this year to regain its market leadership, which has dropped significantly since January amid growing competition from its main competitor, Yamaha.

AHM, which has been the motorcycle market leader in Indonesia for many years, launched one of the new models Friday, promising more affordability and reliability to Indonesian motorcycle fans.

The Honda Fit X bebek model, which has a 100cc four-stroke engine and a price tag of Rp 10.5 million (about US$1,129) off the road, is now available in Jakarta.

Dubbed "economical, reliable and functional", the Honda Fit X and two upcoming products -- a sporty motorcycle and an automatic scooter -- are expected to increase the company's sales by 20 percent this year, AHM marketing director Johannes Loman said at the launching ceremony.

He said the company hoped to sell between 2.2 million and 2.4 million motorcycles this year. "We are still looking to be number one in Indonesia," said Johannes.

With the expected increase in sales, AHM is currently increasing its production capacity so as to be able to produce about 200,000 motorcycles a month beginning September, he said.

AHM, which has led the country's motorcycle market for many years with a market share of about 55 percent, has seen its market share decline since January this year amid an aggressive marketing campaign by its main rival, Yamaha.

Honda's monthly market share fell to between 42 and 45 percent in the first semester of this year from an average of more than 53 percent last year.

By contrast, Yamaha's monthly sales continued to increase in the first six months of this year. In July, its sales amounted to 161,016 motorcycles, far higher than the 131,615 motorcycles it sold in the same month last year. Meanwhile, Honda's monthly sales fell to 143,223 in July from 186,047 in the same month last year.

In the first semester of this year, national motorcycle sales amounted to 2.11 million, with AHM controlling 43 percent of the market, Yamaha 41 percent and Suzuki and other producers the remaining 16 percent. Last year total motorcycle sales amounted to 4.42 million units.

Japanese motorcycles still dominate Indonesia's motorcycle market. Chinese-made motorcycles have tried to make inroads into the market over the last five years, but with little success.

However, the entry of TVS Motor, the leading two-wheel manufacturer in India, will make the competition even tighter,

The company's Indonesian unit TVS Motor Company Indonesia has recently launched its Neo and Apache motorcycle brands in the country.

TVS Motor chairman Venu Srinivasan said recently that he was upbeat the company's Indonesian unit would be able sell up to 100,000 units in its first year of operations, despite the strong competition from more established manufacturers in the country.

In order to meet this sales target, the company specially designed its two new small-engine capacity models to satisfy the unique characteristics of Indonesian buyers, he said.

The motorcycles will be sold at prices ranging from Rp 9 million to Rp 11.8 million, off the road (excluding tax). As an initial step, the motorcycles will be available in Jakarta and West Java. (02)