Honda 2007 Annual Report Download - page 17
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15
6,000
5,000
4,000
3,000
2,000
1,000
0
60
50
40
30
20
10
0
01 02 03 04 05 06
(Thousands of units) (%)
Other companies
Astra Honda
Honda’s share
Source: Honda
Overall Indonesian Market and
Honda’s Market Share (Year)
(Reference) Units sold on a wholesale basis
200
150
100
0
20
15
10
5
0
(%)
MaySep.
05
Nov. Jan.
06
Jul. Sep. Nov. Jan.
07
Mar. Mar.
Units sold per month on wholesale basis
Inflation rate (right scale)
Policy interest rate (right scale)
YOY Growth Rate in Units Sold on
Wholesale Basis (left scale)
(%)
50
Demand Recovery in line with declining both inflation rate and policy Interest Rate
Worsening
credit conditions
Rising inflation rate
Inflation rate declines
Decline in policy interest rate
Demand recovery
Demand stagnation
Sources: Information on inflation rates and policy
interest rates from the Bank of Indonesia;
units sold per month on wholesale basis
from Honda
Rising policy
interest rates
Rupiah
deflation
Soaring
gasoline
prices
Models Introduced in
Fiscal 2007
Vario
Mega Pro
Models Introduced in
Fiscal 2008
Revo
2. Indonesia—the World’s Third Largest Motorcycle
Market
Financial Policies in the First Half of Fiscal 2007 Lead to
Sluggish Market
In Indonesia—the world’s third largest motorcycle market, following China
and India—overall demand in calendar 2006* came to approximately
4,630,000 units, down 13.8% from the previous year. In fall 2005, the
Indonesian government raised interest rates in an effort to curb the climbing
rate of inflation initiated by rising gasoline prices. This move, in turn, caused
a credit crunch that dampened consumer purchasing power.
In this problematic market environment, P.T. Astra Honda Motors (Astra
Honda), an affiliate accounted for under the equity method, endeavored to
arouse demand by launching the Mega Pro and Tiger 2000, as well as for
the Vario, a newly introduced scooter equipped with an automatic transmis-
sion (AT) that automatically changes gears according to speed and engine
revolutions. Nevertheless, unit sales declined 11.6% from the previous year,
to 2,340,000 units.
* Wholesale units sold locally
Easing of Financial Policies Contributes to Recovery from
Second Half of Fiscal 2007
Looking at the economic environment in Indonesia, in fall 2006 inflation and
interest rate policy returned to single-digit levels. In calendar 2007, overall
motorcycle demand is expected to return to 2005 levels. As in India, eco-
nomic expansion in Indonesia is expected to continue prompting high rates
of market expansion. Astra Honda continues to promote sales growth by
launching new models and strengthening its sales promotion efforts. The
company is also encouraging rider safety through an enhanced riding trainer
at its dealerships to create an environment that promotes motorcycles.