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Indonesia to see limited growth in car sales: Industry association
Auto expo: Vice President Jusuf Kalla (third left), accompanied by PT Astra Daihatsu Motor president director Sudirman Maman Rusdi, inspects the area after opening the Gaikindo Indonesia International Auto Show (GIIAS) 2015 in the Indonesia Convention Exhibition (ICE) in BSD City, South Tangerang
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Auto expo: Vice President Jusuf Kalla (third left), accompanied by PT Astra Daihatsu Motor president director Sudirman Maman Rusdi, inspects the area after opening the Gaikindo Indonesia International Auto Show (GIIAS) 2015 in the Indonesia Convention Exhibition (ICE) in BSD City, South Tangerang. Frost & Sullivan has predicted total vehicle sales in Indonesia would contract by 4.3 percent year-on-year to 969,100 units in 2016. (JP/R. Berto Wedhatama) (third left), accompanied by PT Astra Daihatsu Motor president director Sudirman Maman Rusdi, inspects the area after opening the Gaikindo Indonesia International Auto Show (GIIAS) 2015 in the Indonesia Convention Exhibition (ICE) in BSD City, South Tangerang. Frost & Sullivan has predicted total vehicle sales in Indonesia would contract by 4.3 percent year-on-year to 969,100 units in 2016. (JP/R. Berto Wedhatama)
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span class="caption">Auto expo: Vice President Jusuf Kalla (third left), accompanied by PT Astra Daihatsu Motor president director Sudirman Maman Rusdi, inspects the area after opening the Gaikindo Indonesia International Auto Show (GIIAS) 2015 in the Indonesia Convention Exhibition (ICE) in BSD City, South Tangerang. Frost & Sullivan has predicted total vehicle sales in Indonesia would contract by 4.3 percent year-on-year to 969,100 units in 2016. (JP/R. Berto Wedhatama)
Automotive sales in Indonesia are likely to increase by 5 percent to reach 1.05 million units this year, an industry association has predicted.
"We are optimistic sales will be better than 2015, but it will not be a major jump," said Association of Indonesian Automotive Manufacturers (Gaikindo) co-chairman Jongkie Sugiarto in the press conference in Jakarta on Wednesday.
Amid the sluggish demand in 2015, Jongkie explained, low-cost green cars (LCGC) were the best selling products while sport utility vehicles (SUVs) recorded the highest jump in demand. "Meanwhile, in the sedan segment sales were squeezed due to the luxury tax," he said.
Last year, Indonesia's vehicle sales reached 1.01 million units, down 16 percent compared to the previous year. Exported vehicles reached 207,000 units, an increase of 5,000 compared to 2014.
Despite the lower vehicle sales, Indonesia still maintained its position as the largest automotive market in ASEAN in 2015.
However, business management consultants Frost & Sullivan predicted total vehicle sales in Indonesia would contract by 4.3 percent year-on-year to 969,100 units in 2016.
Among the key factors that would drag vehicle sales down were the depressed commodity market and the depreciation of the rupiah, Frost & Sullivan Asia Pacific vice president for automotive and transportation Vivek Vaidya said.
The increase in the US' benchmark interest rates and the turmoil in the Chinese economy will further weaken the rupiah. At the end, car prices would be higher as imports of both parts and components as well as completely built up (CBU) cars would get costlier, he said.
"This could have a significant impact on the prices of many models. Imported CBUs, especially luxury cars, are likely to become more expensive. LCGC cars will be the least affected models, due to a high degree of localization," Vaidya explained.
Therefore, he applauded the government's measures to stimulate the industry such as tax incentives, incentives for investment in special economic zones (SEZs), assistance to SMEs, an 8 percent hike in infrastructure spending, and removing restrictions on foreign investment. (ags)
