Italian Motorcycle Makers Tease Indonesian Enthusiasts With New Models
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Italian motorcycle manufacturers are hoping the release of new or updated models would be enough to reinvigorate interest among Indonesian enthusiasts and boost sales, which have been subdued in the past few years amid a weakening currency and slowing economic growth in Southeast Asia’s biggest economy.
From household names such as Ducati, Piaggio and Vespa, to niche brands like Motto Guzzi and Italjet, displayed their latest models at the International Motorcycle and Accessories Exhibition in Milan last week. Thousands of visitors from across the globe, including a dozen importers from Indonesia, attended the world’s most famous exhibition dedicated to two-wheelers.
Ducati featured the Panigale V4R, its latest road-legal competition bike, along with its new Hypermotard 950 and Diavel 1260. The company also introduced updated versions of its Scrambler and Multistrada ranges.
Moto Guzzi showed off its new adventure bike, the V85 TT, while Vespa introduced updates to its GTS and Primavera ranges, while also launching a new electric scooter, the Elettrica.
The new models have invoked confidence among importers looking at expanding the luxury motorcycle market in Indonesia after years of slowing demand.
“We are ready to bring the new Ducati motorcycles to Indonesia, including the three new ones,” said Faby Tsui, marketing director of Garansindo Euro Sports, the sole authorized distributor of Ducati in Indonesia.
Next year, the company plans to add three Ducati stores from just one currently in Jakarta. “We are looking at opening another shop in Jakarta, one in Surabaya and one in Bali,” Faby said.
Italjet Moto, a small motorcycle manufacturer based in Castel San Pietro Terme in Bologna, aired a similar sentiment. The company has just revived its iconic Dragster scooter with a new sporty design unique to its class.
“We would like to enter the Indonesian market. It’s an exciting market, which I believe has many scooter enthusiasts. Indonesia will be the first country outside Europe for us to market the Dragster,” Italjet Moto managing director Massimo Tartarini said.
The company has also laid out a long-term plan for Indonesia, viewing it as a production base in the Asia-Pacific region.
“We are looking at opening another shop in Jakarta, one in Surabaya and one in Bali,”
“We will start production in April or May next year. For the first year, we want to produce it in Italy. For the second year, we want to start manufacturing it in Indonesia for the Asia-Pacific market,” Tartarini said.
However, some importers were less optimistic, pointing out that demand for luxury motorcycles has yet to return to what it used to be several years ago, when the Indonesian economy still enjoyed a windfall from a commodity boom and a strong currency.
Indonesia’s imports of motorcycles, spare parts and accessories from Italy only amounted to $1.3 million last year, half what it was in 2012, according to data compiled by UN Comtrade, the commodity trade section of the United Nations’ statistics division.
The Indonesian economy has yet to return to the growth levels of above 6 percent it used to see between 2010 and 2012. The rupiah now trades at 16,700 to the euro, having depreciated more than 36 percent from the 2012 level, according to Bank Indonesia.
Meanwhile, Indonesia’s efforts to root out corruption have effectively curbed the practice among officials of collecting luxury motorcycles over the past few years.
“I used to see government officials in store bringing all cash in backpacks to buy luxury motorcycles. Today it’s not the case anymore,” one motorbike importer said.
Other importers pointed to the government’s recent decision to raise import taxes on luxury motorcycles and accessories as part of the country’s broader efforts to curb a widening current-account deficit.
Many view the move was ineffective to achieve the goal, considering the relatively small size of the luxury motorcycle market in Indonesia. Italian motorcycles and accessories, for example, only accounted for a tiny part of Indonesia’s $535 million imports of bikes and accessories last year, mainly from China, Thailand and Vietnam.
“We hope the tax will only be temporary and that conditions would return to normal soon,” Faby said.
Questions & Answers
Q.Why has demand for luxury motorcycles in Indonesia slowed in recent years?
Why has demand for luxury motorcycles in Indonesia slowed in recent years?
Demand has been subdued due to a weakening currency and slowing economic growth. Also, a decline in a commodity boom's windfall and efforts to curb corruption among officials have impacted the market.
Q.What is Italjet Moto's long-term plan for the Indonesian market?
What is Italjet Moto's long-term plan for the Indonesian market?
Italjet Moto plans to start manufacturing its Dragster scooter in Indonesia for the Asia-Pacific market from the second year onwards. For the first year, production will remain in Italy.
Q.How have recent government policies affected the luxury motorcycle market in Indonesia?
How have recent government policies affected the luxury motorcycle market in Indonesia?
The government has raised import taxes on luxury motorcycles and accessories. This move is part of broader efforts to curb a widening current-account deficit, though some importers view it as ineffective due to the market's small size.
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