Indonesia Two-Wheeler Market – Size, Share, Trends, Opportunity, and Forecast, Segmented By Vehicle Type (Scooter/Moped, Motorcycles), By Propulsion Type (ICE, Electric), By Region, By Competition, 2020-2030F

Market Overview:

The Indonesia Two-Wheeler Market was valued at USD 9.42 Billion in 2024 and is expected to reach USD 11.58 Billion by 2030 with a CAGR of 3.50% during the forecast period. The Indonesia Two-Wheeler Market is experiencing robust growth due to several key drivers. The country's rapidly growing urban population has led to increased demand for efficient, affordable, and convenient transportation. With traffic congestion in urban areas becoming more severe, two-wheelers offer an effective solution for commuting, providing flexibility and ease of movement. Moreover, fuel price fluctuations have prompted many consumers to opt for fuel-efficient two-wheelers. Rising disposable income, particularly in the middle class, also supports the increased purchase of motorcycles, making it a preferred mode of transportation among various demographics.

Emerging trends within the market point to the growing adoption of electric two-wheelers. The shift towards environmentally friendly transportation solutions is gaining momentum as the government continues to support the development of sustainable infrastructure. As a result, the number of electric scooter and motorcycle offerings in the market is expected to rise significantly. Another notable trend is the increasing popularity of premium two-wheelers, driven by a young and aspirational consumer base seeking higher performance vehicles. Technology integration in vehicles, such as smartphone connectivity, navigation systems, and advanced safety features, also attracts more consumers who are looking for modern, innovative products.

Despite the positive market outlook, challenges persist. One of the main obstacles is the fragmented regulatory environment, which often makes it difficult for manufacturers to navigate the complexities of local laws and requirements. The lack of standardization in infrastructure, particularly in smaller cities and rural areas, also limits the potential growth of two-wheelers in those regions. Lastly, the market faces competition from alternative modes of transport, such as ride-sharing services, which may dampen the demand for personal vehicles in urban centers. Despite these challenges, the Indonesia Two-Wheeler Market continues to expand, driven by innovation and evolving consumer preferences.

Market Drivers

Urbanization and Traffic Congestion

The rapid urbanization of Indonesia has led to an increased demand for personal vehicles. As cities expand, traffic congestion has become a significant issue, particularly in large metropolitan areas. Two-wheelers provide an efficient and practical solution, offering easier maneuverability through crowded streets. The ability to avoid traffic jams and reach destinations faster makes motorcycles an attractive choice for daily commuting, leading to an increased adoption of two-wheelers in urban areas. Urban centers like Jakarta, Surabaya, and Medan are experiencing higher two-wheeler adoption as individuals look for alternative means to avoid traffic. Furthermore, the compact size of two-wheelers makes them easier to park, a major advantage in congested city spaces.

Affordability of Two-Wheelers

Motorcycles are relatively affordable compared to other modes of transportation, such as cars. For many Indonesians, owning a two-wheeler is more accessible due to the lower purchase price, reduced maintenance costs, and better fuel efficiency. The affordability of two-wheelers makes them an appealing option for a broad consumer base, particularly those in the middle and lower-income segments. As the economy continues to grow, more individuals are able to invest in personal motorcycles for convenience and cost-saving. Financing options offered by dealers further ease the purchasing process, making it even more attractive for first-time buyers. This financial accessibility is helping more Indonesians opt for two-wheelers over public transportation or cars.

Fuel Efficiency

Rising fuel prices have led to a growing demand for fuel-efficient vehicles. Two-wheelers, with their smaller engines, consume far less fuel than cars and offer more economical transportation options for daily commutes. This makes them particularly appealing in regions where fuel prices fluctuate or are high. With fuel efficiency being a major consideration for consumers, two-wheelers are an ideal solution for reducing travel expenses. This is especially true for commuters who travel short distances regularly. As fuel efficiency becomes an even more important factor in consumers' decisions, manufacturers continue to innovate and offer bikes that are even more energy-efficient.

Technological Advancements

The integration of modern technology in motorcycles is driving the growth of the market. Features like smartphone connectivity, advanced navigation systems, safety enhancements, and digital dashboards are attracting younger, tech-savvy consumers. These technological advancements not only improve the user experience but also elevate the appeal of two-wheelers, making them a preferred choice for a more modern and dynamic lifestyle. Additionally, features like anti-lock braking systems (ABS) and improved suspension systems are making two-wheelers safer, attracting more riders. The demand for technological integration in motorcycles is expected to keep growing as consumers become more reliant on digital connectivity.

Rising Disposable Income

As the middle class in Indonesia continues to expand, disposable income levels are also on the rise. This creates greater purchasing power among consumers, enabling them to afford more advanced motorcycles. Higher disposable income is driving demand for both basic and premium two-wheelers, as consumers increasingly seek personal vehicles to enhance their lifestyle. This factor contributes to the overall growth of the two-wheeler market as more people opt for motorcycles as a means of transport. With disposable income growing, more Indonesians are able to afford higher-end models that offer better features and greater performance. This shift in consumer spending is reshaping the two-wheeler market landscape in the country. For instance, Indonesia’s economic outlook remains robust, with real GDP growth projected to average 5.1% over the next three years, fueled by strong consumer spending and rising public investment. In 2024, inflation eased to 2.3%, bolstering household purchasing power and supporting a steady increase in disposable income. While a modest uptick in inflation to 2.8% is expected in 2025 due to a VAT hike to 12%, exemptions on essential goods will help cushion the impact. The stable macroeconomic environment and resilient consumer sentiment are set to drive continued growth in domestic demand and retail spending across key sectors.

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Key Market Challenges

Fragmented Regulatory Environment

The two-wheeler market in Indonesia faces challenges stemming from fragmented regulations. Different regions and local authorities may have varying rules regarding vehicle emissions, safety standards, and licensing procedures, making it difficult for manufacturers to standardize their products across the country. The lack of uniformity in regulations can lead to delays in product launches, increased compliance costs, and operational inefficiencies, creating barriers for both domestic and international companies. Navigating these inconsistencies can be time-consuming and costly for companies looking to expand their reach in the market. These regulatory complexities also limit the ability of consumers to easily access the latest models or technologies.

Underdeveloped Infrastructure

While urban centers in Indonesia are seeing improvements in infrastructure, rural and smaller regions are still lacking adequate road systems. Inadequate road conditions, such as poorly maintained streets or lack of proper signage, can make riding two-wheelers dangerous and inconvenient. The absence of sufficient parking spaces and safe driving lanes further exacerbates these challenges, limiting the growth potential of the market in these areas. Without comprehensive infrastructure development, the adoption of two-wheelers in certain regions remains constrained. Additionally, the lack of proper maintenance and upgrades in road networks contributes to higher wear and tear on two-wheelers, reducing their longevity and increasing maintenance costs.

Intense Competition

The Indonesian two-wheeler market is highly competitive, with numerous local and international brands vying for market share. This competition drives brands to continually innovate and lower prices to attract consumers, putting pressure on profit margins. As a result, companies face challenges in differentiating themselves from competitors, making it difficult to establish strong brand loyalty and maintain long-term market presence. Intense competition also drives price sensitivity, with consumers increasingly looking for affordable options. Brands must focus on enhancing customer service, expanding their service networks, and offering attractive financing options to stand out in this competitive landscape.

Safety Concerns

Motorcycle accidents are a significant concern in Indonesia, with safety being a primary issue for many riders. Poor road conditions, lack of safety gear, and unsafe riding practices contribute to a high rate of accidents. Despite the popularity of motorcycles as a convenient mode of transport, safety remains a major challenge. Many consumers are deterred by the perceived risks of riding two-wheelers, particularly when traveling long distances or in heavy traffic. Manufacturers are increasingly focusing on integrating safety features, but the challenge persists. Efforts to educate the public about safe riding practices and increase the use of protective gear are critical to addressing these concerns.

Government Policy and Taxation

Government policies, such as taxation and import duties, can significantly impact the two-wheeler market. Changes in tax rates or the introduction of new regulations can lead to higher costs for manufacturers and consumers alike. Fluctuating policies regarding import duties on foreign-made motorcycles can also create market uncertainty, discouraging investments and complicating the production process. Companies must navigate these ever-changing regulations to maintain their profitability while keeping product prices competitive. Additionally, strict regulations on emissions and safety standards may require manufacturers to invest in technology and process changes, further adding to the overall cost of production.

Key Market Trends

Shift Towards Electric Two-Wheelers

As environmental awareness grows, there is a notable shift towards electric motorcycles in Indonesia. With increasing concerns over air pollution and fuel consumption, consumers are becoming more interested in sustainable alternatives. The government has also introduced incentives for electric vehicle adoption, creating a favorable environment for electric two-wheelers. This shift is expected to continue as more electric motorcycle models enter the market, offering consumers an eco-friendly option with lower running costs. Electric motorcycles are seen as a cleaner solution, addressing both environmental concerns and rising fuel costs. As charging infrastructure improves, the popularity of electric two-wheelers is set to grow rapidly. For instance, in April 2024, the Indonesian government pledged US$455 million to boost electric motorcycle adoption, targeting the purchase of 800,000 new electric two-wheelers and the conversion of 200,000 existing combustion engine models. The initiative includes a subsidy of Rp 7 million (approximately US$435) per unit to make electric motorcycles more affordable for consumers. This move significantly contributed to the growth of the EV segment, which surged by 62.9% in 2024, marking a historic milestone with 100,000 electric motorcycle sales recorded for the first time in the country.

Growing Demand for Premium Two-Wheelers

The demand for premium two-wheelers is on the rise in Indonesia, driven by a young, affluent consumer base that seeks high-performance motorcycles. These premium vehicles offer advanced features such as enhanced engine capabilities, superior design, and cutting-edge technology. As disposable income increases and consumer preferences evolve, more individuals are willing to invest in premium motorcycles for both utility and status, fueling this trend in the market. Premium motorcycles cater to consumers seeking luxury and superior performance, often offering features like improved suspension, advanced braking systems, and greater comfort. This segment is expected to see consistent growth as more Indonesians seek exclusive and sophisticated motorcycles.

Integration of Advanced Technology

The integration of technology into two-wheelers is becoming a dominant trend, with many motorcycles now featuring smartphone connectivity, GPS navigation, advanced safety systems, and digital dashboards. Consumers are increasingly seeking motorcycles with smart features that offer greater convenience, better control, and improved safety. As technology continues to evolve, manufacturers are focusing on developing innovative features that enhance the riding experience, further boosting the appeal of two-wheelers. Riders are becoming more connected, using their motorcycles not just as a mode of transportation but as an extension of their digital lifestyle. This trend is expected to reshape the market as tech-savvy consumers demand increasingly advanced features.

Shift Towards Shared Mobility

With the rise of ride-hailing and shared mobility services, there is a growing trend of consumers opting to use two-wheelers for short-term rentals. This shift in consumer behavior is driven by the desire for flexibility and affordability. Motorcycle-sharing services are gaining popularity, especially among urban dwellers who need a quick and cost-effective mode of transport for short trips. This trend presents an opportunity for motorcycle manufacturers to develop vehicles suited for shared mobility services, expanding their market reach. Shared mobility offers a sustainable alternative to car ownership, which aligns with the growing focus on reducing traffic congestion and promoting environmental sustainability.

Focus on Environmental Sustainability

Sustainability is becoming an increasingly important trend in the two-wheeler market. Consumers are becoming more conscious of the environmental impact of their choices, pushing manufacturers to develop eco-friendly products. The push for cleaner, greener transportation solutions has led to greater interest in electric motorcycles and more fuel-efficient combustion engines. As environmental concerns continue to rise, the demand for sustainable two-wheelers is expected to increase, shaping the future direction of the market. Manufacturers are also investing in sustainable production practices, including the use of recyclable materials and energy-efficient manufacturing processes, which further supports this growing trend.

Segmental Insights

Vehicle Type Insights

In 2024, motorcycles are expected to dominate the Indonesian two-wheeler market, driven by consumer preferences for performance, versatility, and durability. Motorcycles, particularly in the mid-to-high engine capacity segments, continue to appeal to a wide demographic, offering a balance of power and fuel efficiency. These vehicles are favored for daily commuting, long-distance travel, and as a means of livelihood, especially for riders who work in delivery services and transportation. Their robustness and ability to handle diverse terrains, such as urban roads and rural paths, make motorcycles the preferred choice for many consumers across Indonesia.

On the other hand, scooters and mopeds, while still popular, cater more to the younger and urban segments of the market. They are typically chosen for short-distance commutes and offer convenience, ease of use, and lower fuel consumption. However, scooters and mopeds are more limited in terms of power and speed compared to motorcycles, which impacts their appeal for long-distance travel or heavy-duty applications. In 2024, the dominance of motorcycles reflects the shift in consumer demand toward higher-performance two-wheelers that offer both practical and leisure use.

Motorcycles also benefit from a broader variety of models, ranging from sport bikes to cruisers, which cater to different consumer preferences and requirements. This versatility helps motorcycles maintain a strong market presence, especially in rural areas where their capability to navigate difficult roads becomes a critical factor. In contrast, the scooter segment remains strong in urban centers where shorter commutes and affordability are key drivers. Despite this, motorcycles are expected to take the lead in 2024, with growth driven by their higher utility, better fuel efficiency, and more extensive consumer base.

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Region Insights

In 2024, Java emerged as the dominant two-wheeler market across Indonesia, driven by its dense population, advanced infrastructure, and concentrated urban development. As the island with the highest population in the country, Java presents a massive base of daily commuters who rely heavily on two-wheelers for personal and professional transportation. Cities such as Jakarta, Bandung, and Surabaya are witnessing high levels of urban activity, where motorcycles and scooters have become essential to navigating crowded roads and reducing travel times. The sheer scale of urbanization on the island has created sustained demand for two-wheelers as a practical and cost-efficient solution for mobility.

The region’s dominance is also supported by the availability of established sales networks, widespread service centers, and better financing access, making it easier for consumers to purchase and maintain their vehicles. Java’s economic activity supports a steady flow of employment and logistics-related services that depend on motorcycles, particularly for delivery, courier services, and short-range commuting. This constant movement within the workforce contributes significantly to the growing number of two-wheelers on the road. Moreover, the island’s relatively better-developed infrastructure supports long-term vehicle durability, further promoting two-wheeler ownership among both urban and semi-urban populations.

Traffic congestion in metropolitan areas has intensified the demand for two-wheelers, as people seek quicker alternatives to cars or public transport. Motorcycles allow riders to bypass traffic, find parking more easily, and reduce the cost of commuting. These factors are influencing a shift toward more frequent use of personal two-wheelers among young professionals, gig economy workers, and small business owners in Java. In comparison to other regions such as Sumatra, Sulawesi, or Kalimantan, Java stands out due to its concentrated economic activity and urban sprawl, creating a natural environment for higher two-wheeler penetration.

Recent Developments

• In 2024, ​Honda unveiled two new electric scooters—the CUV e: and ICON e, exclusively for the Indonesian market, marking a significant step in its plan to launch 30 electric models globally by 2030. The CUV e:, a 110cc-equivalent scooter, features dual swappable Honda Mobile Power Pack e: batteries, three riding modes (Standard, Sport, Econ), and an optional reverse mode, catering to urban commuters seeking versatility and convenience. ​
• In 2024, TVS Motor Company is set to expand its presence in the ASEAN region by leveraging its Indonesian manufacturing facility to export electric vehicles to neighboring markets. The company has completed advanced testing and is preparing for exports, capitalizing on the ASEAN Free Trade Agreement to streamline distribution. With exports already accounting for approximately 25% of its turnover, TVS aims to strengthen its position in Southeast Asia by utilizing its local sourcing and manufacturing capabilities in Indonesia.
• ​In 2023, Maka Motors secured $37.6 million in seed funding to launch electric two-wheelers tailored for Indonesian riders. Backed by top investors, the startup began pilot trials and plans mass production by late 2024, supporting Indonesia’s EV adoption goals.

Key Market Players

• PT Bajaj Auto Indonesia
• PT TVS Motor Company Indonesia
• Yamaha Indonesia Motor Mfg
• PT Layur Astiti Bumi Kencana
• PT Astra Honda Motor
• PT. Smart Motor Indonesia
• Suzuki Indonesia
• PT. Sanyang Industri Indonesia
• Piaggio Indonesia
• PT Kawasaki Motor Indonesia 

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    Motorcycles

·         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 presents 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 the 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).

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