Indonesian Car Sales Sputter as Economy Drops a Gear
Jakarta. Indonesia's domestic car sales fell 17 percent in the January-May period, a deputy chairman from the industry's professional association said on Tuesday, as the nation feels the effects of slowing consumer demand amid a global price slump in commodities.
Indonesian Automotive Manufacturers Association (Gakindo) deputy chairman Yogannes Nangoi said sales have fallen to 443,328 units in the five-month period from 531,805 in the same period in 2014 due to slowing growth and spiking inflation restraining consumers.
"Java as the center of automotive industry has started to feel the pinch from Sumatra and Kalimantan," said Yohannes, noting falling commodity prices have curbed demand from the country's two largest islands.
Sales in May fell to 79,383 cars, down 2.7 percent from April's 81,600 cars.
Toyota remains the market leader with 29 percent market share in May, followed by Daihatsu (18 percent) and Honda (14 percent).
Yohannes expects car sales to improve in August as he hopes government infrastructure projects gain traction and macroeconomic conditions improve.
Another deputy chairman with Gakindo, Jongkie D Sugiharto, said decreasing car sales had already been predicted earlier in the year in line with the slowdown in economic growth.
The largest economy in Southeast Asia expanded 4.7 percent in January to March period from the same period a year ago. It was the slowest expansion pace in five year, with economists now predicting 5 percent full year growth for 2015, compared to the 5.7 percent targeted by the government.
"Car sales has a tight correlation with economic growth, exchange rate and the people’s purchasing power." Jongkie said. "If those factors weakening, there's nothing Gaikindo or sole agents can do."
GlobeAsia
Tags: Keywords: