This research investigates relationship between the exogenous variables of supply and demand functions, and endogenous variables of price and quantity, by the state space model (SSM). First, we investigate the demand-supply model of scooter motorcycle market and then identified it. Next, through the combination of the reduced form and the state space model, we successfully apply the SSM on the medium scooter market. We use the monthly data, for the last 12 years, to test the model and find that the estimated result of SSM is better than that of previous research which uses the reduced form alone. This research finds that the slope of the supply function is decreased over time since the technology advancement favors the large production volume. The other finding is that the increasing influence of the wage coefficient on the supply.