Indonesia Scooter Market Outlook to 2028

Indonesia Scooter Market Overview

The Indonesia scooter market size in 2023 reached USD 5.4 billion, driven primarily by increasing urbanization, traffic congestion, and rising fuel costs, which prompted a shift towards more economical transportation solutions like scooters. The growth of e-commerce and the need for quick, last-mile delivery options also boosted the demand.

The key players in the Indonesian scooter market include Honda, Yamaha, Suzuki, and Vespa. Honda dominates the market in 2023, owing to its strong brand recognition, extensive dealership network, and reliable after-sales service. Yamaha follows, offering a wide range of models catering to different consumer segments, from affordable commuter scooters to high-end models.

The market has recently seen the growing adoption of electric scooters, driven by government incentives and consumer interest in eco-friendly transportation options. Major ride-hailing platforms like Gojek and Grab are increasingly integrating electric scooters into their fleets, reflecting the market's shift toward sustainable mobility solutions. This trend is expected to drive future growth as electric scooters become more accessible and widespread in urban areas.

Jakarta, Surabaya, and Bandung are the dominant cities in the Indonesian scooter market due to their high population density, traffic congestion, and limited parking space, which make scooters a practical choice for daily commuting. In 2023, Jakarta dominated market, driven by a strong preference for two-wheelers among urban commuters. The ease of maneuverability and lower costs associated with scooters make them highly popular in these cities.

Indonesia scooter Market Segmentation

By Product Type: The Indonesia scooter market is segmented by product type into gasoline scooters, electric scooters, and hybrid scooters. Gasoline scooters emerged as the dominant segment due to their affordability and the widespread availability of refueling infrastructure. Gasoline-powered scooters have long been favored by consumers for daily commuting, especially in rural areas where charging facilities for electric scooters are limited. Their durability, low maintenance, and familiarity contribute to their continued strong presence in the market.

By End User: The Indonesia scooter market is divided by end user into individual consumers, commercial fleet operators, and government entities. Individual consumers dominate the market, as scooters provide a cost-effective solution for navigating traffic congestion in urban areas. With increasing urbanization and the demand for affordable personal transport, scooters have become a preferred choice for daily commuting.

By Region: The Indonesia scooter market is segmented by region into North, South, East, and West. The North region holds a dominant position in the scooter market due to high urban density and severe traffic congestion. Scooters are the preferred mode of transport in this region for their convenience in navigating narrow streets and busy urban landscapes. Additionally, the presence of numerous ride-hailing services has further boosted scooter adoption in the northern part of Indonesia.

Indonesia Scooter Market Competitive Landscape

Company Name

Year Established

Headquarters

Honda Motor Company

1948

Tokyo, Japan

Yamaha Motor Co.

1955

Iwata, Japan

Suzuki Motor Corp.

1909

Hamamatsu, Japan

Vespa (Piaggio)

1946

Pontedera, Italy

TVS Motor Company

1978

Chennai, India

Honda Motor Company: In 2023, Honda launched its latest model, the Honda Vario 160, in Indonesia. This model features advanced features such as smart key systems and enhanced fuel efficiency. The company has also expanded its production capacity in the country by 10% to meet the growing demand. Additionally, Honda introduced a new after-sales service program, which offers free maintenance for the first year, enhancing customer loyalty.

Yamaha Motor Co.: In February 2024, Yamaha released the latest model of its mainline NMAX scooter in Indonesia, the biggest motorcycle market for the Japanese maker. Yamaha is integrating connected technology into its scooter models, offering features like real-time tracking, maintenance alerts, and safety enhancements. This move is aimed at appealing to tech-savvy consumers and differentiating Yamaha from competitors in Indonesia's rapidly growing market for smart and electric scooters.

Indonesia Scooter Market: In-Depth Analysis

Growth Drivers

Rising Middle-Class Group: The Indonesian scooter market is growing due to a rising middle class with higher disposable incomes and increasing demand for affordable transport amid urban congestion. Indonesia has a population of over 270 million people, with a significant portion living in urban areas. The popularity of electric scooters and advanced features, combined with Indonesia's unique geography and infrastructure, also contributes to market expansion by encouraging the adoption of scooters for commuting.

Increasing demand for two-wheeler rental services: Indonesia's growing popularity as a tourist destination, with attractions like Ubud Monkey Forest and Elephant Safari Park, is driving demand for scooters through ride-hailing services. Tourists prefer two-wheeler rentals from companies like Gojek and Grab due to fewer license requirements and convenience. Also, the cost per ride is on average 12,000 IDR, while rental per day was 100,000 IDR. This trend boosts the demand for scooter ride-hailing services, as visitors increasingly choose them over private taxis for exploring the country.

Rising Adoption of Electric Scooters Supported by Government Policies: The Indonesian government's push for sustainable transportation has led to a notable increase in the adoption of electric scooters. Furthermore, the introduction of green zones in cities like Jakarta, where only electric vehicles are allowed, has incentivized consumers to switch to electric scooters, fostering market growth.

Challenges

Inadequate Charging Infrastructure for Electric Scooters: One of the major challenges facing the Indonesian scooter market, particularly the electric segment, is the lack of adequate charging infrastructure. This limited infrastructure has deterred potential buyers, especially in rural and suburban areas where charging stations are scarce, impacting the overall adoption rate of electric scooters.

High Traffic Accident Rates Involving Scooters: Traffic safety remains a significant challenge for the scooter market in Indonesia. This high accident rate is primarily due to the lack of proper traffic regulations and awareness among scooter riders. The perception of scooters as less safe compared to other vehicles has been a deterrent for some potential buyers, particularly among families.

Government Initiatives

Encouragement of electric scooters purchase: The Indonesian government has allocated a $455 million subsidy to encourage the purchase of electric motorcycles, aiming to promote the adoption of electric scooters and reduce carbon emissions. This initiative is part of a broader effort to enhance sustainable transportation options and decrease reliance on fossil fuels across the country.

Extension of Tax Initiatives: The Indonesian government is extending tax incentives to boost the electric vehicle (EV) market, including eliminating luxury tax on electric vehicles and extending import tax exemptions until the end of 2025. This policy aims to increase the affordability and adoption of electric scooters and other EVs, promoting a shift towards greener transportation options.

Indonesia Scooter Market Future Outlook

The Indonesia Scooter Market is projected to grow exponentially by 2028. This growth will be driven by the Rising Middle-Class Group, increasing demand for two-wheeler rental services and Rising Adoption of Electric Scooters Supported by Government Policies.

Future Trends

Expansion of Electric Scooter Market: Over the next five years, the electric scooter segment in Indonesia is expected to grow significantly, driven by continuous government support and technological advancements. This growth will be fueled by the expansion of the charging infrastructure, the development of more efficient battery technologies, and increasing consumer awareness of environmental issues

Integration of Advanced Safety Features in Scooters: The future of the Indonesian scooter market will likely see a shift towards models equipped with advanced safety features, such as ABS (Anti-lock Braking System), traction control, and automated emergency braking.
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