Indonesia Two-Wheeler Market Segmented By Vehicle Type (Scooter/Moped, Motorcycle), By Propulsion Type (ICE and Electric), By Region, By Company, Forecast & Opportunities, 2018-2028

Market Overview

Indonesia Two-Wheeler Market has valued at USD 8.7 Billion in 2022 and is anticipated to project robust growth in the forecast period with a CAGR of 2.8% through 2028. The Indonesia Two-Wheeler Market stands as one of the most vibrant and significant segments within the country's automotive industry. Indonesia, with its large population and diverse geography, presents a unique landscape for the two-wheeler market. Motorcycles and scooters play an integral role in the daily lives of Indonesians, serving as essential means of transportation for both urban and rural areas. The market's prominence is underscored by its sheer size and scale. Indonesia ranks among the world's largest two-wheeler markets, driven by factors such as population density, traffic congestion, and the need for cost-effective mobility solutions. Motorcycles and scooters are widely favored for their affordability, fuel efficiency, and agility in navigating Indonesia's congested roads. A key contributor to the growth of the Indonesia Two-Wheeler Market is the country's expanding middle class and increasing urbanization. As more Indonesians achieve higher income levels, the demand for personal mobility options surges. Two-wheelers offer a practical and accessible solution, especially in urban areas where traffic congestion is a prevalent issue. Indonesia's geography, which comprises a mix of bustling cities and remote villages, also plays a role in shaping the market. Two-wheelers serve as versatile vehicles that can navigate both urban streets and rural terrains. The market's diversity extends to a wide range of vehicle types, from traditional motorcycles to modern scooters and even electric two-wheelers as the country embraces sustainable mobility solutions.

Key Market Drivers

Population Density and Demographics

Indonesia's vast population is a primary driver of the two-wheeler market. With over 270 million people, the country has a large pool of potential consumers. The sheer number of individuals seeking affordable and practical transportation solutions fuels the demand for two-wheelers. Motorcycles and scooters offer a cost-effective means of mobility for a wide range of consumers, from urban dwellers to rural residents.

Urbanization and Traffic Congestion

Rapid urbanization has led to increased traffic congestion in Indonesian cities. Two-wheelers offer a solution to navigate through congested streets, providing agility and ease of movement. In densely populated urban areas, motorcycles and scooters allow commuters to bypass traffic jams, reducing travel time and improving overall convenience.

Affordability and Accessibility

The affordability of two-wheelers compared to four-wheeled vehicles makes them accessible to a broader range of consumers. For many Indonesians, motorcycles and scooters are the most cost-effective option for personal transportation. The relatively low upfront cost, coupled with lower operating expenses in terms of fuel consumption and maintenance, positions two-wheelers as an attractive choice for transportation.

Income Distribution and Middle-Class Growth

Indonesia's expanding middle class drives demand for improved mobility options. As more individuals achieve higher income levels, they seek enhanced transportation solutions beyond traditional modes. Two-wheelers cater to this segment by providing convenient, affordable, and versatile means of commuting, contributing to the market's growth.

Rural Connectivity

Indonesia's diverse geography includes both urban centers and remote rural areas. Two-wheelers play a critical role in connecting people in these regions where four-wheeled vehicles may face challenges. Motorcycles and scooters enable access to essential services, employment opportunities, and education, serving as a lifeline for many rural communities.

Regulatory Framework and Incentives

Government policies and regulations significantly influence the two-wheeler market. Incentives for low-emission vehicles, safety standards, and fuel efficiency requirements shape manufacturers' offerings. These policies encourage the development and adoption of more technologically advanced two-wheelers that align with environmental and safety goals set by the government.

Fuel Efficiency and Operating Costs

Rising fuel prices and the need for economical transportation contribute to the demand for fuel-efficient vehicles. Two-wheelers, especially scooters, are known for their fuel efficiency, making them an appealing choice for consumers seeking to save on operating costs. This driver becomes especially pertinent when considering the overall cost of ownership over time.

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Key Market Challenges

Traffic Congestion and Urbanization

Rapid urbanization in Indonesian cities has led to increased traffic congestion. While two-wheelers offer agility in navigating congested streets, the rising number of vehicles, including motorcycles and scooters, can exacerbate traffic issues. This challenge affects not only the efficiency of two-wheeler travel but also overall road safety and transportation systems.

Safety Concerns

Safety is a significant challenge in the Indonesia Two-Wheeler Market. High accident rates and inadequate enforcement of traffic rules contribute to road safety risks. Inadequate helmet usage, reckless driving behaviors, and a lack of proper infrastructure for two-wheeler safety exacerbate these concerns. Improving road safety education, awareness, and infrastructure is crucial to address this challenge.

Environmental Impact

The popularity of two-wheelers in Indonesia has environmental implications, particularly in terms of air quality and emissions. Many older models lack advanced emission control technology, contributing to higher pollution levels. The challenge lies in transitioning to cleaner and more efficient two-wheelers that comply with stricter emission standards, balancing the benefits of mobility with environmental responsibility.

Infrastructure Limitations

The availability of appropriate infrastructure for two-wheelers is a challenge, especially in rapidly growing urban areas. Insufficient parking facilities, inadequate road design for two-wheelers, and a lack of designated lanes hinder safe and convenient two-wheeler travel. Addressing these limitations requires urban planning that accommodates the unique needs of two-wheeler commuters.

Market Saturation and Competition

The Indonesia Two-Wheeler Market is highly competitive and saturated, with numerous manufacturers vying for consumer attention. This can lead to pricing pressures and a focus on cost-cutting measures that might compromise quality. The challenge for manufacturers is to differentiate their products while maintaining affordability and meeting consumer demands.

Consumer Behavior and Preferences

Consumer behavior and preferences can pose challenges to market growth. While many consumers prefer the affordability and convenience of two-wheelers, changing preferences toward four-wheeled vehicles or emerging alternative mobility solutions could impact demand for two-wheelers. Understanding and adapting to shifting consumer preferences is essential for sustained market success.

Regulatory Complexities

Regulatory changes and uncertainties can impact the market. Shifting emission standards, safety regulations, and government policies can affect manufacturers' strategies and product offerings. Adapting to evolving regulations while maintaining product quality and affordability requires a balance that can be challenging to achieve.  

Key Market Trends

Rise of Electric Two-Wheelers

The trend toward electrification is gaining momentum in the Indonesia Two-Wheeler Market. Electric two-wheelers, including electric motorcycles and scooters, are becoming more prominent as environmental awareness grows. With a focus on reducing emissions and promoting sustainability, manufacturers are introducing electric models that offer quieter operation, lower operating costs, and reduced environmental impact.

Connected and Smart Features

Technological advancements are driving the integration of connected features in two-wheelers. Smartphones and digital platforms are being paired with two-wheelers to offer navigation, connectivity, real-time vehicle data, and even remote diagnostics. These features enhance the rider’s experience, provide convenience, and allow manufacturers to offer personalized services.

Safety Enhancements

Improved safety features are a growing trend in the market. As road safety concerns gain attention, manufacturers are introducing advanced safety technologies such as anti-lock braking systems (ABS), traction control, and electronic stability control. These features enhance stability and control, contributing to safer rides and reducing accidents.

Customization and Personalization

Customization is becoming a significant trend as consumers seek to express their individuality through their two-wheelers. Manufacturers are offering more customizable options, allowing consumers to personalize their vehicles with unique colors, graphics, and accessories. This trend caters to consumers who value self-expression and want their vehicles to stand out.

Rise of Ridesharing and Mobility Solutions

The trend of urbanization has led to increased traffic congestion and a shift toward shared mobility solutions. Ride-sharing platforms are expanding to include two-wheelers, offering an alternative to conventional taxis and rideshare services. These platforms provide affordable and convenient transportation options, particularly in congested urban areas.

Emission Standards and Environmental Awareness

Stricter emission standards and growing environmental awareness are pushing manufacturers to develop cleaner and more efficient two-wheelers. This trend aligns with global efforts to reduce air pollution and combat climate change. Manufacturers are introducing technologies like fuel injection, catalytic converters, and hybrid options to meet emission targets.

Shift to Premium and Performance Models

As consumers' disposable incomes rise, there is a growing demand for premium and performance-oriented two-wheelers. This trend is driving the introduction of higher-end models with advanced features, better performance, and enhanced styling. Manufacturers are expanding their product portfolios to cater to this segment of enthusiasts.

Segmental Insights

Vehicle Type Insights

In Indonesia, motorcycles command the largest market share amongst two-wheeled vehicles. This dominance can be attributed to several factors. Firstly, the affordability of motorcycles makes them a popular choice among many Indonesians who fall into the middle-income group. Secondly, the country's often congested roadways make motorcycles an ideal choice for navigating through heavy traffic. Lastly, the widespread presence of motorcycle-taxi services like Go-Jek and Grab Bike has further boosted the popularity of motorcycles in the country.

Fuel Type Insights

In Indonesia, the two-wheeler market is predominantly dominated by petrol-based engines, owing to their widespread availability and cost-effectiveness. However, a noticeable shift towards electric two-wheelers is being observed, driven by growing environmental consciousness and government incentives promoting green transportation. Despite these advancements, the adoption rate of electric two-wheelers remains relatively low, primarily due to concerns regarding battery lifespan and the lack of charging infrastructure across the country. Thus, while petrol remains the preferred fuel type for two-wheelers in Indonesia, an impending shift towards electricity is evident.

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Regional Insights

Java, the world's most populous island and home to the vibrant capital city of Indonesia, Jakarta, holds the largest share of the two-wheeler market in Indonesia. With its dense population, bustling cities, and prevalent use of motorcycles for daily commuting, Java significantly surpasses other regions like Sumatra, Kalimantan, Sulawesi, Maluku, and Papua, as well as Bali and Nusa, in terms of two-wheeler market size. This dominance can be attributed to the island's extensive road network, well-established distribution channels, and a strong motorcycle culture deeply ingrained in the daily lives of its residents. From the congested streets of Jakarta to the scenic rural areas, the sight of motorcycles weaving through traffic is a common and integral part of Java's dynamic transportation landscape.

Recent Developments

• In 2023, Indonesian government is allocating around USD 455 million to subsidise the electric motorcycles sales in the country.
• In 2023, Indonesian coal miner PT TBS Energi Utama and PT GoTo Gojek Tokopedia has formed a joint venture called PT Energi Kreasi Bersama to launch an electric scooter plant in West Java (Indonesia).

Key Market Players

·         Honda Motor Co., Ltd.

·         Yamaha Motor Co., Ltd.

·         Suzuki Motor Corporation

·         Kawasaki Heavy Industries, Ltd.

·         Bajaj Auto Ltd.

·         Harley-Davidson Inc.

·         Piaggio Group 

·         KTM AG

·         TVS Motor Company

Report Scope:

In this report, the Indonesia Two-Wheeler market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Indonesia Two-Wheeler Market, By Vehicle Type:

o   Scooter/Moped

o   Motorcycle

• Indonesia Two-Wheeler Market, By Propulsion Type:

o   ICE

o   Electric

• Indonesia Two-Wheeler Market, By Region:

o   Sumatra

o   Kalimantan

o   Sulawesi

o   Maluku & Papua

o   Bali & Nusa

o   Java

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Indonesia Two-Wheeler Market.

Available Customizations:

Indonesia Two-Wheeler market report with the given market data, Tech Sci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).