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'Cheap green cars' boost March auto sales in Indonesia

Publication Date : 11-04-2014

 

Indonesia's auto sales grew by 17.8 percent year-on-year in March, supported by the brisk sales of so-called low-cost green cars (LCGC), according to an association.

The Association of Indonesian Automotive Manufacturers (Gaikindo) recorded sales of 113,079 cars in March, compared to 95,996 car sales in the same month last year.

Car sales in March were dominated by Japanese automakers Toyota Motor Corp., Daihatsu Motor Co. Ltd. and Mitsubishi Motors Corp., according to reports.

Gaikindo deputy chairman Jongkie Sugiarto said the sharp increase in auto sales was a result of LCGC sales.

At the moment, Toyota and Daihatsu are the only manufacturers producing and selling LCGC, which carry a price tag of around 100  million rupiah (US$8,804).

Jongkie said more people were able to purchase cars, thanks to the availability of the low-cost cars and improvements in the country’s economy.

“Our economy is improving, the BI [Bank Indonesia] rate seems to be stable at 7.5 per cent and our currency is strengthening against the US dollar,” he told The Jakarta Post via text message on Thursday.

“All these elements have contributed to rising car sales.”

Likewise, Amelia Tjandra, marketing director at PT Astra Daihatsu Motor, said Daihatsu’s sales from January through March this year had been dominated by family cars and “affordable” LCGC.

Daihatsu’s sales in the first quarter of 2014 reached 98,771, up 18 per cent year-on-year, according to a press statement released last Saturday.

Echoing these views, Rizwan Alamsjah, executive marketing director with PT Krama Yudha Tiga Berlian Motors (KTB), brand holder of the Japan-based Mitsubishi, said the sales surge in March was expected.

“Indonesia’s economy has been improving and its growth this year is expected to be greater than last year, so I think an increase in auto sales was expected,” he said.

However, Toyota Astra Motor’s marketing director, Rahmat Samulo, said it was unlikely the rise in sales would continue.

“An increase in auto sales is usually seasonal and doesn’t last long; if there is an increase today, there might be a drop tomorrow,” he said.

Rahmat added that the increase was most likely due to the launch of new car models from various manufacturers released late last year or earlier this year.

“Although March experienced a sharp increase, I think total sales this year will not be so different to those of last year,” he concluded.

Auto sales hit an industry-record high of 1.23 million throughout last year, despite economic uncertainty and the depreciation of the rupiah.

Last year’s sales were also dominated by Japanese manufacturers, namely Toyota, Daihatsu, Suzuki and Mitsubishi, with a combined market share of more than 90 per cent.

Jongkie had previously predicted that this year’s sales would not exceed last year’s record due to “slower economic growth, depreciation of the local currency and a potential rise in loan rates”.

He also said that potential buyers would think twice before purchasing vehicles, as the Jakarta administration was planning to raise the vehicle-ownership transfer fee (BBNKB) from its current 10 per cent to 20 per cent later this year.

 

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