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Global chip crunch stunts Indonesia car sales recovery
Automakers see the semiconductor shortage as preventing them from fully using a temporary tax cut on new cars to recover sales to prepandemic levels.
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Workers load cars onto a truck at the Astra Daihatsu Motor (ADM) car factory in Karawang, West Java, on August 2019. (Antara Photo/Rivan Awal Lingga)
T
he global semiconductor supply crunch has held back the recovery of Indonesian car sales, but local automakers say they have been spared from the worst, given the country's relatively low demand for high-tech vehicles.
Association of Indonesian Automotive Manufacturers (Gaikindo) data show that domestic car sales grew 73.2 percent year-on-year (yoy) to 84,113 units in September.
In contrast, car sales are estimated to have dropped 20 percent yoy in China, 25 percent yoy in the United States (US) and 23 percent yoy in the European Union – the three biggest car markets in the world – over the same month, due to the chip shortage, according to local associations and forecasters.
Gaikindo members instead see the chip shortage as a hurdle for recovering car sales to pre-pandemic levels, especially as the clock ticks on a temporary cut on luxury taxes (PPnBM) for new cars. The September sales figure remains 12 percent below that in 2019.
Read also: Indonesia reinstates temporary tax break for small-car sales
“Most carmakers have been affected, but the situation is still manageable,” Gaikindo secretary-general Kukuh Kumara told The Jakarta Post on Monday.
He explained that Indonesia’s car market was dominated by “simpler models” aimed at lower-middle-income consumers. These models use fewer electronics than high-tech models aimed at middle-upper-income consumers.
