Indonesia 2026: March Motorcycle Sales Plunge 17.2%, Hit By Doubling Gasoline Prices.

The Indonesian motorcycle market has lost momentum. Sales plummeted by a significant 17.2% in March-breaking a streak of seven consecutive months of year-over-year growth-amidst a more than doubling of gasoline prices. The first quarter of 2026 concluded with a 4.5% decline, and the months ahead are expected to be challenging.

The Motorcycle Industry: Trends and Outlook
Indonesia's motorcycle industry-the third-largest globally-plays a pivotal role within the country's industrial ecosystem; serving as the primary mode of personal transportation, its sales volume is nearly six times that of the passenger car market.

Following a production halt in 2020 caused by the COVID-19 pandemic (approximately 90% of motorcycles are locally manufactured), market growth has lost momentum. The market saw a modest increase of +2.1% in 2024, followed by a mere 0.6% growth in 2025, reaching a volume of approximately 6.55 million units-still significantly below the peak of 8 million units recorded in the preceding decade.

In a separate development, electric motorcycle manufacturers find themselves operating within an increasingly uncertain policy environment. Government incentives introduced in mid-2023 were set to expire in December 2024, and their renewal was repeatedly postponed throughout 2025. Authorities ultimately announced that no new incentives for electric vehicles would be introduced, thereby creating an extremely unstable framework for investment and market development.

The start of 2026 proved negative, with first-quarter sales totaling 1.65 million units-a 4.5% decline compared to the same period last year. Notably, sales in March plummeted by 17.2%, snapping a streak of seven consecutive months of year-over-year growth.

A more than twofold increase in gasoline prices has dealt a severe blow to consumers, an impact that was immediately reflected in the two-wheeler industry. Furthermore, while other countries in the region have successfully registered and boosted demand for electric vehicles, the situation in Indonesia remains distinct, given the sector's complete lack of incentives and the weakening of its medium-term strategic direction.

Despite policy uncertainties, Chinese electric vehicle giant Yadea has announced a major investment in electric scooter and motorcycle manufacturing in Indonesia. A delivery ceremony for the first batch of vehicles, held on March 14, 2024, in Cikarang, Bekasi, marks a significant milestone in Yadea's expansion strategy within Southeast Asia.

Located in Bekasi, West Java, Yadea Indonesia's production facility spans 28,000 square meters. Equipped with state-of-the-art amenities and advanced manufacturing technologies, the plant boasts an annual production capacity of 300,000 units. This investment underscores Indonesia's long-term strategic importance to global electric vehicle enterprises-even as short-term policy uncertainties continue to weigh on the domestic electric two-wheeler market.