Jakarta Globe, Harso Kurniawan, November 7, 2013
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| Attendees look at vehicles displayed at the Indonesia International Motor Show in Jakarta on Thursday, Sept. 19, 2013. (Bloomberg Photo) |
Strong
demand for cheap cars sent domestic car sales over one million in the first 10
months of this year, bolstering confidence among car producers that initial
sales targets may be exceeded.
Car sales
rose to 1,018,786 in the January-to-October period, up 10 percent from 923,071
units sold in the same period last year, based on preliminary data from
manufacturers and car distributors.
The cheap
cars are mostly sold for less than Rp 100 million a unit, thanks to the
government’s low-cost green car policy that offers tax benefits if cars can
meet fuel efficiency targets.
Such
programs provide affordable alternatives for customers, whose purchasing power
fell as the rupiah slumped 18 percent on the back of a current account deficit
and accelerated inflation after the government raised subsidized fuel prices in
June, said Jongkie Sugiharto, deputy chairman of Association of Indonesian
Automotive Manufacturers (Gaikindo).
Car sales
are on target to reach 1.2 million units this year, above the industry’s
initial target of 1.1 million sales in 2012.
“We are
seeing a switch from multipurpose vehicles to these LCGCs,” Amelia Tjandra,
marketing director at Astra Daihatsu Motor, said on Wednesday.
Manufacturers
have introduced six models under the LCGC program, including the Toyota Agya
and Daihatsu Ayla, which went on sale in September.
The models
are a result of collaboration between the country’s largest car distributor,
Astra International, and Japanese carmaker Toyota Motor.
Sales of
the new models are forecast at more than 30,000 units this year and 90,000
units next year.
The models
qualify for the government’s low-cost green car policy, which excludes luxury
tax on such cheap and low-emissions cars by between 25 and 100 percent if the
models are 90 percent made of local content and have mileage of 20 kilometers
per liter of fuel.
Honda also
started selling the Brio Satya in October, with Nissan’s Datsun Go and Go+ and
Suzuki’s Karimun Wagon R set to hit showrooms next year.
Neighboring
Thailand introduced a similar program in 2010. Dubbed eco-car, the first model
to roll off the production line was the Nissan March. The program is said to
have changed the landscape of the car industry in the kingdom.
For
individual brands, Toyota still dominates the domestic car market with 357,332
units sold in the first 10 months of this year, followed by Daihatsu with
154,156 units.
Suzuki came
third with 134,428 units, ahead of Mitsubishi (131,407), Honda (76,888) and
Nissan (52,712).
On monthly
data, manufacturers sold 110,507 cars in October, up 3.5 percent from the same
month a year earlier.
Shares of
Astra International rose 2.3 percent to Rp 6,700 In Jakarta trading on
Thursday, while Indomobil Sukses International, which distributes brands like
Suzuki and Nissan, lost 1 percent to Rp 5,000, compared with a 0.82 percent
decline in the composite index.
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