Cars roll off the assembly line at a factory near Jakarta. (Antara Photo/Muhammad Adimaja)

Domestic Car Sales Drop 13% in First Half


JULY 17, 2019

Jakarta. Domestic car sales have dropped 13 percent in the first six months of this year compared to the same period a year ago. Weak commodity prices have put the brakes on commercial car sales as continued political uncertainty surrounding April's elections scared off retail and corporate consumers enough to delay purchases. 

Manufacturers shipped only 481,577 cars to distributors in the first half, down from 553,733 vehicles a year ago, according to Astra International, Indonesia's largest car distributor, quoting data from the Indonesian Automotive Industry Association (Gaikindo). 

Sales of big item purchase like cars are often used to gauge the strength of Indonesian household consumptions, which account for half of the country's economy.  

"Some consumers delayed purchases because of the presidential election. We hope the market can rebound in July," Fransiscus Soerjopranoto, the executive general manager of Toyota Astra Motor, said on Tuesday. 

Toyota remained the best-selling brand in the domestic car market with sales of 155,139 cars, followed by Daihatsu (87,023), Mitsubishi (80,929), Honda (59,087), Suzuki (46,557) and Nissan (7,176).

Astra, which handles the Toyota, Daihatsu, Isuzu and Peugeot brands, sold a total of 253,489 cars to reach a share of 53 percent of the market, up from 51 percent last year. 

The data have made some manufacturers pessimistic that car sales can match last year's 1.15 million units sold. 

"If our agents work hard, we can get up to 1.12 million-1.13 million units," Franciscus said. 

On the other hand, Indonesia's car exports have been increasing. Exports of car and spare parts rose to $3.68 billion in the first half – 6.9 percent higher than $3.44 billion in the same period a year ago, data from the Central Statistics Agency showed. 

The growth owed mostly to exporting a wider variety of cars to more export destinations, Gaikindo chairman Yohannes Nangoi said.

"We now ship 11 brands to 80 countries. We also export more models for each brand," he said.

Yohannes said he was confident car exports could grow by at least 10 percent this year. 

He said local manufacturers are now capable of making 2 million cars every year – almost double the domestic market demand and leaving ample room for exports. 

"And what we produce here are excellent quality vehicles that meet global standards," he said.