M

otorcycle and automotive industry groups are confident that weak sales at the start of the year will not be reflective of full-year performance, banking on the recent central bank rate cut and stronger purchasing power to stoke growth.

Two-wheeler sales fell 17.2 percent to 416,263 units while four-wheeler'€™s dropped 9.9 percent to 84,885 in comparison with the same period a year ago, according to industry group data.

'€œIt'€™s too early to say that the drop forecasts the overall view of this year'€™s sales. There are still many other factors that we have to take into account, including the BI [Bank Indonesia] interest rate cut and government goal to see economic growth increase to 5.3 percent,'€ said Jongkie Sugiarto, chairman of the Association of Indonesian Automotive Manufacturers (Gaikindo), on Tuesday.

The car wholesale number of nearly 85,000 is still a 15.9 percent increase month-on-month and well within Gaikindo'€™s monthly sales target of 87,500 car sales, he added.

Gaikindo targets 1.05 million car sales this year, almost stagnant from 2015 sales of 1.01 million, which was a drop from 1.2 million units annually in 2014 and 2013.

BI cut its key rate late last year by 25 basis points, prompting banks to lower lending rates, which in turn is expected to stoke spending and revive economic growth that slowed to 4.8 percent last year, the weakest since the 2009 global financial crisis.

The central bank has also lowered the down payment requirement for automotive and motorcycle purchases to around 20 percent from 30 percent previously to improve public purchasing power.

Meanwhile, the government is also pushing efforts to boost growth through economic stimulus policy packages and speedier disbursement of infrastructure spending.

The Indonesian Motorcycle Industry Association (AISI) is also pinning its hopes on government efforts to revive the economy through the real sector to boost people'€™s purchasing power.

Small and medium enterprises (SMEs) and the lower middle-income group cover more than 50 percent of motorbike market targets, while the government'€™s efforts to triple its micro credit program (KUR) loans is expected to help the sector.

The motorbike wholesale number of over 416,000 was dominated by Honda brands (287,776 units), followed by Yamaha (10,681), Suzuki (5,587) and TVS (95).

'€œThe drop in the beginning of the year happened as the market was still adjusting from the available stock carried over from last year. Besides, there aren'€™t that many workdays in January. Most of us open only on the sixth day,'€ AISI trade division head Sigit Kumala said, dismissing any concern over the weak turnout.

The motorbike industry group is aiming for 6.5 million units to be distributed this year after seeing only 6.4 million in motorbike sales in 2015, a drop from 7.8 million in 2014.

In detail, Honda aims to sell 4.45 million motorbikes this year, the same target as last year. Yamaha wants to sell 2 million, down from 2.55 million eyed in 2015. Meanwhile, Suzuki has a sales target of 150,000 motorbikes, higher than about 140,000 targeted last year.

To reach the sales target this year, industry players set various strategies, ranging from regenerating products, settling more deals with multifinance firms to strengthen bonds with bikers'€™ communities.

PT Suzuki Indomobil Motor launched on Tuesday the all-new Satria F150, equipped with a lighter engine and the ability to reach 100 meters in less than seven seconds.

Some 300 bike lovers and bloggers came to test drive the new product and were offered a discount of Rp 3 million from the original price of Rp 20 million. (rbk)

'€” Grace D. Amianti contributed to this story
________________________________________