Car Manufacturers Pin Hopes of Sales Revival on Twin Motor Shows

The 23rd Indonesia International Motor Show, pictured, opened at the Kemayoran fairground in Central Jakarta on Wednesday, while the inaugural Gaikindo Indonesia International Auto Show opens on Thursday in the BSD township west of the capital. (Antara Photo/Wahyu Putro)

By : Carla Isati Octama & Tabita Diela | on 8:44 PM August 19, 2015
Category : Business, Corporate News, Economy, Featured

[Updated at 10:28 p.m. on Wednesday, Aug.19, 2015, to correct shrink rate in the first paragraph] 

Jakarta. Two competing motor shows open this week, offering a glimmer of hope for car and motorcycle manufacturers to boost sales, which have shrunk 21 percent in the first seven months of this year.

The 23rd Indonesia International Motor Show opened at the Kemayoran fairground in Central Jakarta on Wednesday, while the inaugural Gaikindo Indonesia International Auto Show opens on Thursday in the BSD township west of the capital.

“We hope we can boost sales, but I don’t know how much the contribution will be,” Jongkie D. Sugiarto, an executive of Gaikindo, the Indonesian automotive manufacturers’ association.

Gaikindo until last year participated in the IIMS, but an administrative spat led to the association breaking with IIMS organizer Dyandra Promosindo to run its own show, which it touts as the biggest motor show in Southeast Asia.

The IIMS, which has lost much of its luster this year with the absence of major Gaikindo members, was opened on Wednesday by Vice President Jusuf Kalla, who acknowledged the slide in car sales as consumer purchasing power weakens amid slowing economic growth.

The vice president said car manufacturers faced a short-term challenge, but was confident that the industry would flourish in the medium to long term, pointing out that cars were “now considered a basic necessity,” thus helping sustain and even boost demand.

Car sales from in the first seven months of 2015 totaled 581,106 units, down nearly 21 percent from the 733,444 cars that manufacturers sold in the same period last year, according to Gaikindo. Sales in July alone, at 55,618 units, were down 39 percent from the same period last year.

Gaikindo has cut its sales forecast for 2015 twice since the start of the year, with its target now at 950,000 units. If the trend holds, this will be the second straight year of declining annual sales.

“Slow economic growth [has] reduced domestic consumption,” said Tira Ardianti, the head of investor relations at Astra International, the country’s biggest car distributor, whose various units assemble and market models from Toyota, Daihatsu, BMW and others.

“We’ve seen this trend since the end of last year,” Tira said.

Astra International controls 42 percent of the country’s car market, but its total sales for the first seven months of 2015 are down 25 percent to 285,884 units.

Other manufacturers see the dual automotive shows as a big opportunity to raise their profile among domestic customers.

“We don’t want to talk about numbers,” said Biswadev Sengupta, Tata Motors Indonesia’s president director, when asked about his sales target from the IIMS. “We want to make people aware of our brand and products.”

A. Rieva Muchsin, chief marketing officer at distributor Garansindo Inter Global, which imports and markets more exotic marques such as Alfa Romeo, Chrysler and Fiat, said he had “faith that the IIMS will do more than just introduce new brands and educate people with electric technology.

“Hopefully, this will lead to something better, like increasing sales, or at least boost people’s excitement again about premium cars,” he said.

Motorcycle makers such as Yamaha, Honda and Kawasaki will also participate in both shows exhibitions in a bid to boost flagging sales.

Motorcycle sales in the first seven months of the year, at 3.596 million units, are down 24 percent from the same period last year. Sales in July of 421,838 units are down 27 percent drop from July last year.

Additional reporting by Arientha Primanita & Vanesha Manuturi

GlobeAsia

Correction: A previous version of this story stated car sales have shrunk 40 percent in the first seven months this year.  It should have shrunk 21 percent. 

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