Vehicles trapped in gridlock in Jakarta on Feb. 9, 2015. (Antara Photo/Rosa Panggabean)

KIA Mobil Sees Its Indonesian Sales Little Changed at 9,000 Units in 2015

FEBRUARY 23, 2015

Jakarta. Kia Mobil Indonesia, the sole distributor of South Korean auto manufacturer Kia Motors, expects sales to be little changed this year, as the weak rupiah dives up prices of imported completely built-up cars.

The company forecasts a 0.7 percent increase in sales to 9,000 units in 2015, compared to sales of 8,936 units last year, Kia Mobil marketing director Hartanto Sukmono said last week. That is in line with a forecast by the Indonesian Automotive Industry Association’s (Gaikindo) for sales to be stagnant, matching 1.2 million cars sold in 2014.

“Indonesia’s political situation affects business in general. The rupiah’s weakened exchange rate also affects the automotive industry, because Kia is still importing completely built-up cars,” Hartanto said.

Kia Mobil hopes that further reductions in borrowing costs would push down leasing and bank interest rates. Bank Indonesia, the country’s central bank, cut its benchmark policy rate by 25 basis points to 7.5 percent last week on the back of easing inflation.

“Most of our customers are still using leasing and bank loans,” Hartanto said.

Kia Mobil would depend on small hatchbacks All New Picanto and All New Rio as the main source for its 2015 sales, contributing up to 80 percent of total sales. Kia sold 3,716 units of All New Picanto and 3,586 units of All New Rio. Kia also plans to launch three new cars in 2015.

Investor Daily