Entrepreneur / December 2015

Passion on Wheels

Duncan MacRae has spent more than 30 years in Bali, become an Indonesian citizen and traveled to remote islands to indulge his love for reptiles. As well as starting a reptile park in Bali, he has had a life-long attachment to ‘adventure’ motorcycles, a passion that he wants to leverage to make Indonesia the world’s third biggest market for BMW motorcycles. By Elsid Arendra

Stepping foot for the first time on Bali more than 30 years ago, a young man from Scotland quickly developed a soft spot for the island. His affection for Bali and for Indonesia in general also led Duncan MacRae to develop a number of businesses which he runs with love and passion.

Indonesia is the third largest market for motorcycles after China and India. Last year, according to the Indonesian Motorcycle Industry Association (AISI), sales reached nearly eight million motorcycles.

That was a little surprising because according to projections the market was supposed to be sluggish due to various natural disasters in the first half and politics in the second half. In the end, the year turned out to be better than the preceding year.

The ups and downs of Indonesia’s motorcycle market have not been a barrier to Duncan. He quickly had to learn to deal with the bureaucracy and the intense competition in Indonesia’s motorcycle market. The one-time English teacher made up his mind to enter the automotive industry by concentrating solely on the premium motorcycle market.

That was a very niche market compared to the value of sales of motorcycles in Indonesia. Nevertheless the large variety of premium bike brands on sale in the country is an indication that the premium motorcycle market holds great promise.

Motorcycle culture has deep roots in Indonesia. The first bike was brought to the country in 1893, a mere eight years after the Daimler Reitwagen, acknowledged as the world’s first motorcycle, was produced in Stuttgart, Germany.

In more recent times, the rise of the Indonesia economy has boosted the population’s buying power and spending on automotives has been a major contributor to economic growth.

Duncan first decided to opt for a niche of the niche market. Over five years ago he established PT Bali DirtBike, which started by importing a small dirt bike. A year ago PT Bali DirtBike officially became the authorized dealer in Indonesia for BMW Motorrad.

“As an authorized importer and authorized dealer of BMW motorcycles in Indonesia, we already have the hardware in the form of MOS PC (management online service) for the fifth variant of the BMW,” Duncan told GlobeAsia in an interview in Denpasar.

“I’m optimistic sales of BMW Motorrad in Indonesia will increase,” said the entrepreneur, who when he’s not busy with bikes enjoys his collection of reptiles.

Small but sexy

Indonesia has become an important market for BMW Motorrad International, with sales ranking seventh in the world last year.  A total of 123,495 BMW motorcycles were sold worldwide in 2014, up 7% on 115,215 units in the previous year.

Since BMW Motorrad Indonesia became the official agent here, it has recorded average sales of 10 with 20 sold in one month. Before Duncan earned ‘official’ status, he was already importing its bikes as a general importer. All up he claims to have sold up to 100 units and believes that the BMW motorcycle population in the country has at least ten times.

Most buyers have gone to general importers for their bikes but that still benefits BMW Motorrad Indonesia both in terms of sales and after sales service.

The best-selling model is the R1200GS Adventure, which makes up 80% of total sales. Duncan’s target is to see the Indonesian operation become one of the world’s top three markets for BMW bikes by 2020. The market may not be huge compared to the total motorcycle market in the country, but it remains an excellent business.

The middle class in Indonesia is expected to grow by 40% and purchasing power will develop in parallel. Those who previously were able to buy a house and a car will be able to buy a premium motorcycle as a lifestyle statement.

BMW Motorrad Indonesia is moving to grab a big share of this growing market with a new offering, the BMW F800R, which will be imported from Thailand to reduce the cost and the luxury tax.

BMW also plans to launch a sport bike with a below-300cc engine, further adding to Duncan’s confidence. The Munich-based company is also participating in the Superbike World Championship, boosting the appeal of bikes like the S1000RR. Duncan is optimistic that the market share in the 250cc category will boost sales in coming years, with BMW bikes carrying price tags ranging from Rp350 million to Rp650 million.

“The 250cc motorcycle market is very attractive and sexy. Therefore we are ready to launch three variants of 250cc motorcycles. There will be the sport type, naked and adventure. This special type of adventure bikes refers to the design of the famous BMW bike, the R1200GS Adventure,” stated Duncan.

The coming 250cc models will have a price tag of only around Rp60 million, putting in range of many people’s pockets. And although sales of premium motorcycles are currently being depressed by sales and luxury tax ranging between 75% and 125%, BMW Motorrad Indonesia sees a good opportunity for the government to win some investment and host a premium motorcycle plant in Indonesia. Sales are increasing in Thailand and Malaysia, with growth in double figures in the past three years.

As the founder of BMW Motorrad Indonesia, Duncan is trying to encourage the government to cut back the bureaucratic processes and provide attractive incentives for foreign investors in the market.  So far, most big bikes are imported from Thailand in completely knocked down (CKD) form.

Since Indonesia is the leading motorcycle market in Southeast Asia, there’s no reason why it shouldn’t develop its own premium manufacturing industry rather than just playing the role of a market for big bikes, he argues.

A labor of love

Duncan has been lucky enough to spend his life doing work that he enjoys in a place that he loves. “Indonesia is not only beautiful but its culture and hospitality are exceptional. That makes it different from other countries. I’ve been to many other countries, but only Indonesia has impressed me,” he said.

Starting his career as an English teacher in Denpasar, he established a gold and silver jewelry business a few years later. “We were able to import machines and tools from Italy as our company was growing. It was a very bright and promising business. But my passion for Indonesia and its nature made a crucial turnaround,” he recounted.

The husband of Tati, a native Balinese, sold all his assets and established a new start-up, the Rimba Reptile Park in Singapadu. His affection for Indonesia’s wildlife had led the father of four to remote islands across Indonesia and he came across several extraordinary reptiles. One was found to be a previously unknown species, which now carries his name.

While building his reptile park Duncan maintained his old hobby of riding off-road motorcycles, another love that led him to become an importer of Italian brand Husqvarna, a pioneer of motocross.

Duncan’s reputation as an outlet for Husqvarna in Indonesia reached the attention of BMW Motorrad AG in Germany, which had bought the Husqvarna brand. BMW Motorrad in Germany made Duncan an offer to act as their main distributor in Indonesia.

The company saw the Indonesian market for premium bikes as lucrative. It was a dream come true for Duncan, now 50 and an Indonesian citizen. “With the BMW brand known across the world, I am not just selling a motorcycle, I am selling passion. Those who want to buy a large motor must have a passion,” he stressed.