The Jakarta Post
Indonesia’s automotive manufacturers have expressed optimism that national car sales will soon bottom out and show a rebound as early as March despite a further drop in January and risks posed by the COVID-19 outbreak.
The country’s car sales stood at 1.03 million units last year, a 10.8 percent drop compared to a year before, according to data from the Association of Indonesian Automotive Manufacturers (Gaikindo). The association blamed sluggish sales on political uncertainties due to the 2019 general elections that hold people off from buying big-ticket items, such as cars.
Sales further dropped in January amid heavy flooding that struck several regions in the country, especially Jakarta and a novel coronavirus outbreak but the association maintained its target of selling 1.05 million cars this year.
“While the COVID-19 spread has adversely affected sales, the absence of a political agenda and a subsiding trade war has supported the automotive industry,” Gaikindo chairman Yohannes Nangoi said at the Gaikindo Indonesia International Commercial Vehicle Expo (GIICOMVEC) 2020 opening ceremony in Jakarta on Thursday.
“I expect car sales in February to remain flat compared to January. Hopefully, they will recover in March,” he added.
The pneumonia-like illness has infected almost 100,000 people in around 85 nations and killed more than 3,300 worldwide, disrupting economic activities in countries around the globe.
President Joko “Jokowi” Widodo announced on Monday the country’s first confirmed COVID-19 cases, prompting efforts by the government and financial authorities to cushion the economy from any possible hit.
Currently, the government is preparing a stimulus package to ease export and import regulations as supply chains are expected to start getting hit by the virus spread. The stimulus will be the second of its kind after a Rp 10.3 trillion (US$725 million) package announced earlier for boosting private consumption and the tourism sector.
Industry Minister Agus Gumiwang Kartasasmita said he was confident that the local industry had enough automotive parts despite the outbreak that disrupted factories’ activities in various countries, mainly in China.
“According to a Gaikindo members’ report, their supply chains face no problems so far and the industry has enough stockpiles to continue production for the next three to four months,” he said.
The Asian Development Bank (ADB) president Masatsugu Asakawa said in Jakarta on Wednesday that he believed Indonesia was less likely to experience a strong impact from the global outbreak than other countries in the region, such as Japan or Thailand.
“Indonesia isn't deeply integrated into the global supply chain, so it is still considerably fortunate compared to other countries,” Asakawa said, adding that the Indonesian economy which was primarily driven by domestic activity was at an advantage during the global health emergency.
The country’s economy grew by 4.97 percent in last year’s fourth quarter, the slowest rate in three years, as investment and exports cooled. Following the outbreak, the government expects growth to slow to 4.7 percent in this year’s first three months.
Despite these challenges, Mitshubishi Fuso truck distributing company PT Krama Yudha Tiga Berlian Motors (KTB) maintained its positive outlook for 2020.
“We project truck sales for the domestic market will increase by 7 percent,” the company’s marketing director Duljatmono said, adding that the company aimed to sell 46,900 trucks and acquire 46 percent of the market share for trucks in 2020. (mpr)