The Jakarta Post
The Indonesian automotive industry is not anticipating a heavy blow from the novel coronavirus outbreak, although the February sales figure dropped to the lowest level in eight months and the industry's top event, the Indonesia International Motor Show (IIMS) 2020, had been "postponed indefinitely".
Car sales continued to decline with 79,573 units sold in February, a 2.73 percent decrease from 81,809 units in February last year and the lowest level since June 2019, according to data provided by the Association of Indonesian Automotive Manufacturers (Gaikindo).
However, the association downplayed the foreseeable impacts from COVID-19, which the World Health Organization (WHO) declared a "pandemic" on March 11 in Geneva.
“We do not expect COVID-19 to greatly impact the market. Car sales in February were impacted by the virus [outbreak], as the hard-hit tourist industry was forced to postpone purchases of tour buses and other vehicles,” Gaikindo chairman Yohannes Nangoi told The Jakarta Post on Tuesday.
Sales had also declined in January as a result of widespread severe flooding in several regions, including the capital city, and growing negative sentiment and public fears of the COVID-19 epidemic that emerged on Dec. 31, 2019 in Wuhan, China.
Domestic car sales were also expected to follow a downward trend in March and April as the COVID-19 continued to disrupt the economy and the daily lives of Indonesians.
“I think there will be a further fall in March as the virus closes schools, offices and dissuade people from visiting retail shops, including car showrooms,” Yohannes said.
The industry association is, however, maintaining its 2020 sales target of 1.05 million cars.
In contrast, the decision to postpone the IIMS, one of the biggest industry expos in Indonesia, is likely to spell trouble for the automotive industry.
“The event organizers were wise in postponing the event, considering the current condition. However, [its] postponement will affect the automotive industry, as IIMS contributes greatly to car sales,” Yohannes conceded.
The motor show was originally scheduled to run from April 9 to 19 in Jakarta and from April 15 to 19 in Makassar.
Event organizer PT Dyandra Promosindo announced on Monday that it had decided to postpone the IIMS 2020 indefinitely, following President Joko “Jokowi” Widodo's public call on Sunday to practice social distancing to stem the spread of COVID-19.
Social distancing is a public health measure to slow the person-to-person transmission of an infectious disease by maintaining physical distance. In the case of COVID-19, the recommended minimum distance is 1 meter "between yourself and anyone who is coughing or sneezing", according to the WHO's public advice page for COVID-19.
“We were initially optimistic that the effects from the COVID-19 pandemic would recede gradually, but recent developments show otherwise. We believe that postponing the IIMS 2020 is for the best during this challenging time,” Dyandra Promosindo president director Hendra Noor Saleh said in a press statement.
The Indonesian motor show is a much-anticipated industry event, with the IIMS 2019 posting sales of 13,288 vehicles for a total transaction value of Rp 5 trillion (US$332.2 million), Rp 1 trillion more than its transaction target.
The country’s automotive industry has been on a declining trend since last year, which posted passenger car sales of 1.03 million units, a 10.8 percent drop from the year before.
Gaikindo blamed the sluggish sales on political uncertainty during the 2019 general election that held people off from buying big-ticket items, including cars. (mpr)