February Car Sales Indonesia Fall slightly, Cause for Optimism?
An improvement has been detected in Indonesia's car sales. According to the latest data from the Indonesian Automotive Industry Association (Gaikindo) car sales in Indonesia totaled 88,250 units in February 2016. Although this figure is 0.6 percent down from sales in the same month one year earlier, the percentage fall is the slowest since August 2014. Noegardjito, Secretary of Gaikindo, said this limited decline came on the back of Indonesia's improving economy. However, February was still the 18th consecutive month of contracting car sales in Southeast Asia's largest economy.
There are several factors that could support a rebound in car sales in Indonesia this year. Firstly, the government of Indonesia is eager to enhance infrastructure development across the nation. Secondly, Indonesia's financial authorities - Financial Services Authority (OJK) and Bank Indonesia - are eager to cut the relatively high lending rates in Indonesia. This should make it cheaper to finance a car purchase through credit from a financial institution. Thirdly, Indonesia's state-owned oil & gas company Pertamina announced on Tuesday (15/03) it cut unsubsidized fuel prices (in line with the movement of global oil prices earlier this year). However, the price of Premium, the widely used low-octane gasoline, remains unchanged at IDR 7,050 per liter.
Based on the aforementioned, Gaikindo expects Indonesia's car sales to rise by 5 percent year-on-year (y/y) in 2016. Car sales in the first quarter of the year will still be sluggish but particularly in the second half of the year sales should increase on the back of improving macroeconomic conditions.
Further Reading: Analysis & Overview of Indonesia's Automotive Industry
However, Indonesian car exports fell sharply in February 2016. The latest data from Statistics Indonesia (BPS) show that the value of Indonesian car exports and car parts plunged 17.4 percent (y/y) to USD $389.1 million in February. Particularly exports to the Middle East fell sharply amid low crude oil prices.
Indonesian Car Sales (CBU):
Month | Sold Cars 2012 |
Sold Cars 2013 |
Sold Cars 2014 |
Sold Cars 2015 |
Sold Cars 2016 |
January | 76,427 | 96,718 | 103,609 | 94,194 | 84,885 |
February | 86,486 | 103,278 | 111,824 | 88,740 | 88,250 |
March | 87,917 | 95,996 | 113,067 | 99,410 | |
April | 87,144 | 102,257 | 106,124 | 81,600 | |
May | 95,541 | 99,697 | 96,872 | 79,375 | |
June | 101,746 | 104,268 | 110,614 | 82,172 | |
July | 102,511 | 112,178 | 91,334 | 55,615 | |
August | 76,445 | 77,964 | 96,652 | 90,537 | |
September | 102,100 | 115,974 | 102,572 | 93,038 | |
October | 106,754 | 112,039 | 105,222 | 88,408 | |
November | 103,703 | 111,841 | 91,327 | 86,938 | |
December | 89,456 | 97,706 | 78,802 | 73,264 | |
Total | 1,116,230 |
1,229,916 |
1,208,019 | 1,013,291 |
2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |
Car Sales (car units) |
607,805 | 486,061 | 764,710 | 894,164 | 1,116,230 |
1,229,916 | 1,208,019 | 1,013,291 |
Car Exports (car units) |
100,982 | 56,669 | 85,769 | 107,932 | 173,368 | 170,907 | 202,273 | 207,691 |
Source: Gaikindo
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