Decline in car, motor sales loom after July

JAKARTA. Automotive sales are expected to decline this month after strong growth in July, as rules increasing minimum down payments and rising fuel prices begin to take their toll.

Figures from the Indonesian Automotive Industry Association (Gaikindo) showed that nationwide car sales rose 12 percent to 714,400 units in the first seven months of the year. Sales in July reached 112,184 units, rising around 7 percent on the previous month.

Idul Fitri holiday purchases contributed to the July increase, yet sales would likely be lower this month, given fewer working days, which meant less time for sales and deliveries.

Gaikindo deputy chairman Johnny Darmawan said that a clearer outlook for full-year car sales would be based on sales in September, when selling activities would return to normal.

“If sales are lower than 100,000 units in September, the national market will likely see sales of below 1.1 million units for the year. If they are at 100,000 units, car sales will be at 1.2 million,” Johnny said.

The domestic market saw a 24.8 percent increase in car sales to 1.12 million units in 2012.

This year the market is expected to flatten out due to new government policies, including the imposition of minimum down payment increases for car purchases through Sharia financing starting last April. The increase of the central bank key rate to 6.75 percent is also expected to slow down the car market, as financing firms will also increase their financing rates, which in turn may make buyers reconsider purchasing a car.

Figures from Gaikindo also showed that PT Astra International saw sales growth decline 6.4 percent compared to the national market for its products in the first seven months of the year. However, its month-on-month sales rose by around 8.2 percent in July compared to June, higher than the national market rate, which only grew 7.6 percent. Astra’s products include Daihatsu, Isuzu and Toyota.

Sales of Honda automobiles, through PT Honda Prospect Motors (HPM), remained the highest. HPM sold 57,847 cars during the period from January to July, an increase of 72 percent year-on-year. The company also reported that its sales rose by 12 percent in July compared to a month earlier, thanks to growing capacity.

The company said earlier that it had projected a 44 percent increase in its car sales to 100,000 units by the year end.

“Growing sales in July showed that Indonesia’s market is getting better. We will continue to seize this momentum and introduce new products in this second semester,” Jonfis Fandy, HPM marketing and after-sales service director, said.

In line with car sales, motorcycle sales also rose in July, despite concerns over the increase in the subsidized fuel price, implemented last June. (Raras Cahyafitri)