New kings of the road: Big motorbike makers rev up in Southeast Asia

Sun Oct 5, 2014 6:20pm EDT
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By Yantoultra Ngui

KUALA LUMPUR (Reuters) - Roads in Southeast Asia have been getting a little louder lately as motorcycle makers, an aspiring middle class and easy bank credit come together to breed a new genus of motorcyclists – the big-bike rider.

Traffic in urban centers such as Jakarta, Kuala Lumpur and Ho Chi Minh City has long been characterized by swarms of small motorbikes and scooters. Honda Motor (7267.T: Quote) and Yamaha Motor (7272.T: Quote), the world's biggest motorbike makers, have dominated this sprawling regional market.

The landscape is slowly shifting as the Southeast Asian market, the world's third-largest after China and India, undergoes a structural change. In Malaysia and Vietnam, motorbikes with bigger engine capacities are outselling their smaller cousins.

Italy's Ducati Motor Holding [DUMTG.UL], Japan's Kawasaki and Austria's KTM KTMP.VI are among motorbike makers looking to build a new axis of growth in this market of 600 million people as orders for larger bikes in first-world countries slow.

They are wooing not just small-bike owners graduating to larger models. They are also chasing riders who already own a four-door subcompact sedan but have no qualms about taking on an additional financial commitment.

Harley-Davidson (HOG.N: Quote) plans to roll out a new entry-level motorcycle, the Street 750, in Southeast Asia early next year. The 749cc model has been a hit in India, with sales accounting for 60 percent of the company's local revenue two months after its launch in February. The bike costs 410,000 rupees ($6,663).

"We are optimistic about the Southeast Asian premium leisure motorcycle market," Marc McAllister, vice president and managing director of Harley-Davidson Asia-Pacific, told Reuters. "The motorcycle is perfectly suited to the region's infrastructure and fast-growing urban cities filled with a younger generation of riders who want an accessible premium ride."

The demand for premium bikes is in step with rising gross national income (GNI) in Indonesia, Thailand, Malaysia, Vietnam and the Philippines - vast countries held together by miles and miles of high-speed motorways, urban roads and rural byways.   Continued...

A visitor looks at a Triumph motorcycle on display at the Indonesian International Motor Show in Jakarta September 19, 2014. REUTERS/Darren Whiteside