TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
As domestic auto sales slump, carmakers cut target to 1 million
Building up: Workers assemble a Mercedes-Benz C-Class model at a Mercedes assembly plant in Bogor, West Java, in 2009
Change Size
B
uilding up: Workers assemble a Mercedes-Benz C-Class model at a Mercedes assembly plant in Bogor, West Java, in 2009. Domestic car sales dropped 11.54 percent to 90,403 units in August this year from 102,197 in the same month last year, according data from the Association of Indonesian Automotive Manufacturers (Gaikindo) compiled by Astra International. (JP/R. Berto Wedhatama)
Dark clouds are still on the horizon for the automotive industry as it failed to rebound in August after a poor performance in the first half of the year.
Domestic car sales dropped 11.54 percent to 90,403 units in August from 102,197 in the same month last year, according to data from the Association of Indonesian Automotive Manufacturers (Gaikindo) compiled by Astra International.
Sales from January to August totaled 660,288 units, down 13.5 percent from 763,444 cars sold in the same period last year.
Almost all carmakers suffered a drop in sales, but Astra International, which holds the distribution and manufacturing rights of Toyota, Daihatsu, Isuzu and Peugeot, continues to dominate domestic car sales with a 52 percent market share.
Toyota reported sales of 29,123 cars in August, down about 6 percent from 31,268 units in the same month last year. Honda's sales fell about 20 percent to 11,909 units from 14,862 units, and Suzuki's decreased about 20 percent to 8,622 units from 10,764 units.
Given the disappointing sales so far this year, Gaikindo cochairman Jongkie D. Sugiarto said the association had revised its full-year target down to 1 million cars from 1.1 million cars previously.
He blamed the election period for contributing to the slowdown between January and July, which saw a year-on-year decrease of around 12 percent.
But Jongkie expressed optimism that the 26th Gaikindo Indonesia International Auto Show (GIIAS) held from July 18 to 28 would bolster sales within the next five to six month. The event was Indonesia’s largest automotive expo, featuring 20 local and foreign carmakers.
With projected monthly sales of 85,000 units, Jongkie expressed hope the industry could meet the 1-million target at the end of the year.
He said the downward trend in credit lending rates would allow carmakers to meet the target, as 75 percent of vehicles were purchased through loans.
“The government is also stable now, so we hope to see more government spending in the future,” said Jongkie, who explained that more infrastructure projects would eventually stimulate domestic car sales.
Indonesia's largest automotive company, Astra International, has gained some ground in the market as its share increased to 50 percent in July and 52 percent in August, after nosediving to 45 percent in June, the lowest level in years.
Despite the decline in car sales, Astra’s shares rose on the Indonesian Stock Exchange (IDX). On Wednesday, Astra’s shares gained 3.47 percent to close the day at Rp 6,700 (47 US cents) with 24.5 million shares changing hands.
Securities firm Jasa Utama Capital Sekuritas analyst Chris Apriliony explained that Astra shares had been under pressure lately due to the fall in car sales and coal prices.
But with the expected increase in car sales in the second half, he saw an upward trend for Astra’s shares in the remainder of the year. He expects Astra’s share price to reach Rp 7,500 by the end of 2019.
“Astra’s subsidiary United Tractors also recorded a positive performance, strengthening the outlook. So we won’t see any significant decrease in the [yearly] financial report,” he said.
Automotive expert Bebin Djuana begged to differ. He said the industry’s outlook remained gloomy, as global economic turbulences and slow domestic consumption growth would hinder the sector’s progress in 2019.
Finance Minister Sri Mulyani Indrawati previously revised down the government’s expectations for this year’s growth to just 5.08 percent as household spending is expected to grow between 4.97 percent and 5 percent, down from the 5.33 percent projected previously. She cited global economic uncertainty as one of the causes, in addition to the domestic economic situation.
Bebin added that sentiment among his industry player peers was also pessimistic with regard to used cars and motorcycles, which are often poised to grow as sales of new vehicles fall.
“I have yet to see any positive indicators that will trigger sales. In these conditions, more individuals will hold back on their intentions to buy vehicles until the fourth quarter,” Bebin said.
