D

omestic tire sales have recorded a 24 percent drop in the January-July period this year from the 4.5 million units sold in the same period last year.

"The drop in sales is likely to continue until the end of the year, longer than what we had previously estimated. We initially thought domestic and overseas sales would start to pick up in the last quarter this year," Indonesian Tire Association (APBI) chairman Aziz Pane said on Friday.

"Recovery will likely start in the second quarter next year."

APBI estimated earlier this year that tire sales would drop up to 30 percent from the 32 million units sales recorded in 2008.

He added the crisis had caused global uncertainty in both global and domestic tire sales.

"We previously predicted tire sales to OEMs *original equipment manufacturers* would drop, but instead they increased by 2.8 percent to 163,634 units in July from June's record," said Aziz.

OEM purchase components made by other companies to incorporate them in their own products.

"Meanwhile, we earlier thought sales of replacement tires *for individual and company car wheels* would increase. But things turned out a differently," said Aziz.

In July this year, replacement tire sales decreased by 0.7 percent from 375,000 units in June, he said.

APBI data shows tire sales to OEMs were down by 28.7 percent, from 1.5 million units in the first seven months last year to 1.07 million units in the same period this year.

The data also indicates replacement tire sales dropped 21.7 percent from 3 million units in that period last year to 2.35 million units in the corresponding period this year.

At the same time, tire exports, mainly to the United States, also dropped 13.9 percent, from the 15 million recorded in the same period last year.

Japan-based tire producer PT Bridgestone Tire Indonesia has seen a 12 percent drop in both domestic and global sales in the first seven months from the 7 million units recorded in the corresponding period last year.

PT Bridgestone Tire Indonesia estimated its sales would continue declining between 15 and 20 percent by the year end from the 12 million units booked last year.

Aziz said sales to OEMs had soared by 46 percent in 2008, in line with a boom in car sales exceeding 607,805 units, as both the automotive and the tire industries "are strongly related to each other".

Things turned out sour however, he added, as business and individual car owners cut their spending, feeling the pinch from the financial crisis.

"Compared to the national trend, however, our sales decline is smaller," Bridgestone sales department manager John M. Arsyad said on Thursday evening.

Despite a slowdown in its domestic business, Bridgestone booked a 10 percent increase in global sales in June from a month earlier, although "the situation began to weaken again after that", said John.

He added the company would continue to release new products to survive the crisis.