A model stands beside a Honda CRV at the Indonesia International Auto Show in Tangerang, west of Jakarta, Indonesia on Aug 11, 2016. (Reuters Photo/Darren Whiteside)

Dealers Cheer as Indonesians Climb Back Into New Cars


AUGUST 17, 2016

Jakarta. At a thronging auto show on Jakarta's outskirts, the man in charge of selling Hondas to Indonesian drivers is buoyant: consumers are shopping for cars again, breathing life back into southeast Asia's largest market after two bruising years.

Honda, boosted by its popular minivans and a string of new models, is among the top potential gainers, overtaking rival Daihatsu, a Toyota subsidiary, for the first time in more than a decade.

Automobile sales rose for a fourth month in July, rising 12.5 percent from the same month a year earlier, following 20 months of declining sales.

Daya Hansten, marketing boss for Honda's top dealer, credits Honda's popular minivans and attractive finance deals  but he is not alone in his confidence: 25 car brands at this gathering showed off 33 new designs. Daihatsu's local subsidiary launched a new minivan, the Sigra, earlier this month.

"Competition in the second half will be tighter, especially with so many new products by our competitors," Hansten said.

"But the upward trend in sales should strengthen in the second semester [half year], and that makes us more confident."

After five years of a broad slowdown across the economy, Indonesia accelerated faster than expected in the second quarter as consumers began spending more.

Indonesia surprised with its strongest growth in 10 quarters in April-June, spurring some economists to predict it will outperform most Southeast Asian nations the rest of this year.

Car sales are seen as a good indicator of Indonesians' readiness to spend. Growth in car sales turned positive in April and they have climbed since, sparking hopes the industry's sales target of 1.06 million units  5 percent higher than in 2015  could be topped.

Honda, which has bet on the minivan segment that accounts for almost a third of the market, increased sales 34 percent in the first half of this year versus the same period in 2015, far outpacing market leader Toyota growth and compared to the industry's pace of 1.2 percent.

Its market share was 20.6 percent in the first half, up from 7.4 percent in 2013. Toyota and Daihatsu remained stable at around 50 percent.

"Our sales outlook is positive," said Jonfis Fandy, marketing director of Honda's local unit Honda Prospect Motor, noting a potential boost for the second half from lower interest rates.

Toyota Astra Motor and Astra Daihatsu Motor, joint ventures between Toyota and conglomerate Astra International, have also launched several new models, cranking up competition already so intense that Ford Motor pulled out earlier this year.

"The market became full with so many players. Sales of our Xenia were eroded," said Amelia Tjandra, marketing director of Astra Daihatsu Motor, betting on the cheaper Sigra minivan as well as its best-selling Xenia.

For Denny Triswijadi, who bought a new Honda at the car show on Saturday to replace his Toyota, it's a matter of looking at something new. "I just want to try this car. This looks like its more comfortable," he said.