January auto sales fall on economic slump

The Jakarta Post, JAKARTA | Thu, 02/12/2009 10:24 AM   

Sales of new cars, vans and trucks declined in January on the slowdown in economic growth which dampened local purchasing power. 

According to data from PT Toyota Astra Motor and the Indonesian Automotive Industry Association (Gaikindo) auto sales dipped 24 percent to 32,167 units compared to 42,489 in the same period of last year.

Toyota. with its Avanza van, secured around 39,7 percent of  market share, up from 32.3 percent a year earlier. 

“This early part of the year performance is satisfactory given the current unstable economic conditions,” said Toyota-Astra president director Johnny Darmawan.

Gaikindo forecasts sales of cars, trucks and vans will decline by 32 percent to around 405,000 units this year from 603,774  last year as the full impact of the global  economic downturn hits Southeast Asia’s largest economy.

 (JP/Irma)

About 80 percent of Indonesian car, van and truck sales are for vehicles from Japanese manufacturers.

Finance Minister Sri Mulyani Indrawati forecasts that the economy will grow this year by between 4.7 and 5.5 percent, at the most. 

The automotive industry is forecast to be hit hard by weakening demand, with Gaikindo chairman Bambang Trisulo having said earlier that the economy had to grow by 5 percent and inflation had to stay below 8 percent if sales were to reach the median target of 400,000 units.

Bank Indonesia (BI) has been slashing its benchmark interest rates to boost consumer purchasing power, which normally propels more than 70 percent of the economy.

BI recently cut its benchmark interest rate by 50 basis points to 8.25 percent, earlier this month.

Industry players, however, believed BI’s move would not have a considerable impact until the second semester of this year when purchasing power recovery is expected to start to pick up.

More than 80 percent of Indonesian consumers purchase motor vehicles through financing firms, with most of these clients  now believed to be facing some difficulties in paying monthly instalments on time.

Shares of PT Astra International,  the country’s largest auto assembler and distributor, dropped by 6 percent on Wednesday’s trading down to Rp 10,900 from Rp 11,650.

Astra’s closest rival PT Indomobil Sukses International ended unchanged at Rp 1,200.

Last year, automotive companies  aggressively expanded to commodity-rich areas outside Java to profit from the commodity boom. But as the global prices of commodities plunged towards the end of last year, business turned down as well.