Reviving the Motorcycle Industry: Indonesia's Path to Economic Growth through Two-Wheeled Vehicles

Jakarta, INTI - The Ministry of Industry expresses its appreciation to automotive industry players, particularly in the two-wheeled vehicle sector, who continue to contribute to national economic growth. Amid global economic uncertainty, the two-wheeler industry has demonstrated resilience by continuously innovating and providing significant foreign exchange earnings for the country.

“The two-wheeled vehicle industry in Indonesia has shown an upward trend post-COVID-19 pandemic, with production reaching 5.861 million units and domestic sales at 5.058 million units in 2021. By 2023, production increased to 6.807 million units, with domestic sales hitting 6.237 million units. The government hopes this trend continues into the following year, as the contribution of the two-wheeled motor vehicle industry will support Indonesia’s economic growth target of 8% set by President Prabowo Subianto,” stated the Deputy Minister of Industry, Faisol Riza, during the opening of the Indonesia Motorcycle Show (IMOS) 2024 at ICE BSD, Tangerang, on Wednesday (October 30).

Not only serving as a means of transportation, motorcycles are also recognized as essential vehicles that support various activities across regions, from large cities to remote areas. The advancement in the motor vehicle industry is evolving rapidly. Besides internal combustion engine (ICE) vehicles, the public can now ride battery-electric two-wheelers powered by renewable energy, which are environmentally friendly and sustainable.

The Ministry of Industry reports that there are 55 electric motorcycle companies producing approximately 1.51 million units per year. This year, the population of electric motorcycles in Indonesia has also increased to 172,000 units, up about 48% from 116,000 in 2023. “This means the market will continue to grow. People are likely beginning to realize that electric two-wheelers have become a necessity and a lifestyle,” said the Deputy Minister of Industry.

In addition to its development, the motorcycle industry has also successfully supported local supply chains by involving small and medium enterprises (SMEs) in the production ecosystem of two-wheeled motor vehicles, adding more than five million jobs. Currently, the local component level (TKDN) in motorcycle production has reached over 60%, indicating the increasing self-reliance of Indonesia's automotive industry.

To support the purchasing power for battery-based electric vehicles, the Ministry of Industry is implementing a subsidy program for purchasing electric two-wheel vehicles in accordance with Ministerial Regulation No. 6 of 2023. Through this program, the public will receive a purchase subsidy of around IDR 7 million per unit, provided the local content value of the product purchased exceeds 40%.

“The Ministry appreciates manufacturers that continue to introduce EV production lines at the IMOS 2024 exhibition. These efforts will be part of industrial support for the use of renewable energy. Therefore, the Ministry also declares that renewable energy-based industries should become the starting point for building the industrial sector in the future,” explained Faisol.

IMOS 2024 is the largest motorcycle exhibition in Indonesia, showcasing various technological innovations, the latest products, and accessories from motorcycle manufacturers. With a focus on environmentally friendly vehicles and future technologies, IMOS 2024 serves as a platform for industry players to introduce their latest product lines to the Indonesian public.

The IMOS 2024 event represents an important moment for both the public and the industry to understand the latest technological developments, especially in electric motorcycles. This activity is expected to make a positive contribution to the ecosystem and the national automotive industry balance.

Chairman of the Indonesian Motorcycle Industry Association (AISI), Johannes Loman, stated that IMOS 2024 utilizes a larger exhibition area of 15,000 square meters, featuring 19 motorcycle brands and over 40 supporting industry brands.

He mentioned that AISI targets motorcycle sales to reach 6.3-6.4 million units in 2024, with potential demand next year around 6.4-6.7 million units. “We see the motorcycle market will continue to grow and positively contribute to economic development,” he concluded.