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Auto show still leaves questions about domestic consumption
Car sales have always been an indicator of consumption in Indonesia, and the country’s largest automotive expo may provide clues on how eager people are to spend
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ar sales have always been an indicator of consumption in Indonesia, and the country’s largest automotive expo may provide clues on how eager people are to spend.
Unlike in recent years, the annual event seems not to give a clear picture about appetite of car lovers to buy four-wheelers.
The Association of Indonesian Automotive Manufacturers (Gaikindo), the organizer of the Gaikindo Indonesia International Auto Show (GIIAS), said the 11-day event that concluded Sunday saw sales of around 21,000 cars, up 3 percent from 20,384 units sold last year.
“The number might be higher, as there are some Gaikindo members who have yet to report their sales,” Nangoi said in a statement on Monday.
However, the group did not reveal even a tentative figure of sales recorded during the event. Previously, it said it was targeting sales exceeding the Rp 6.1 trillion (US$457.5 million) booked last year.
A rival event held in July, the Indonesia International Motor Show (IIMS), saw 11,604 cars sold, up 2.92 percent from 2016.
The GIIAS auto sales may give car distributors a sigh of relief after sales in the first half of this year disappointed with an increase of just 0.3 percent year-on-year (yoy) to 533,570 units, according to Gaikindo data.
Indonesia’s economy grew at a rate of 5.01 percent yoy in the first half, with household spending, traditionally one of the key drivers of growth in the country, expanding by only 4.95 percent. The economic data contributed to the impression of low purchasing power.
However, economists have pointed out that it is not people’s ability to spend that is declining, but rather their willingness.
The Financial Service Authority (OJK) recorded that loans increased by a relatively low rate of 7.74 percent yoy to Rp 4.49 quadrillion in the first half of the year, which compares to an increase of 8.5 percent a year earlier.
To achieve the result of GIIAS as released by Gaikindo, carmakers had to go the extra mile, particularly by offering attractive discounts. Some automakers even gave a discount of Rp 10 million.
During the event, carmakers unveiled 40 models, three of which were world premieres and included Mitsubishi’s low multi-purpose vehicle (MPV), the Mitsubishi Xpander.
Mitsubishi sold 5,281 units of the new model during the expo, making it the best-seller and outperforming its long-time favorite sport utility vehicle (SUV), the Pajero Sport, of which only 871 units were sold.
“Customers have waited for a long time for a seven-seater with a tough Mitsubishi engine. Xpander has really helped the sales,” said Rizki, a sales officer of PT Mitsubishi Motors Krama Yudha Sales Indonesia.
Despite middle-class appetite for new cars looking hard to predict, car sales in the premium segment may give a hint about domestic consumption.
From January to July, PT BMW Indonesia jacked up its sales of BMW cars by 11.3 percent yoy to 1,329 units, while sales of the MINI increased by 55.56 percent to 266 units, said corporate communications vice president Jodie O’tania.
BMW offered an interest-free lease of up to three years for three models, including the market maker Series 3 Sedan, during the GIIAS.
“We emphasized the promotion on our backbone models. We are optimistic this year, as the premium car market is in a good shape,” Jodie said.
