Low Cost Green Car to Boost Indonesia's 2016 Car Sales

The LCGC has become a popular vehicle in Indonesia, Southeast Asia's largest economy where the low per capita car ownership rate implies that there exists a potentially significant portion of first-time car buyers, most of whom have limited cash and can therefore not afford the more expensive conventional vehicle. Since the LCGC was introduced on the Indonesian market in late-2013, demand has been solid and rising. Currently, the LCGC commands a 16.7 percent market share in Indonesia's car sales market. However, this figure is expected to rise to 20 percent before the year-end due to the launch of new LCGC models.

For example, since the launch of the Toyota Calya and Daihatsu Sigra on 2 August 2016, more than 6,000 orders were placed for these cars (nearly two-thirds of which were orders for the Toyota Calya vehicle). Orders are expected to rise further as both models are highlighted at the 2016 Gaikindo Indonesia International Auto Show (GIIAS), held between 11 - 21 August 2016 in Serpong (Banten). This event is estimated to boost overall car sales in Indonesia in the second half of the 2016.

According to data from the Indonesian Automotive Industry Association (Gaikindo), Indonesia's car sales rose 11.4 percent (y/y) to 91,471 units in June 2016. Meanwhile, Indonesian car sales stood at a total of 531,860 units in the first half of 2016, up 1 percent (y/y) only from car sales in the same period one year earlier, showing that Indonesia's purchasing power and consumer confidence have only grown slightly over the past year. Gaikindo targets to see car sales grow between 5 - 10 percent (y/y) to 1.1 million vehicles in full-year 2016.

LCGC sales rose 10 percent (y/y) to 89,000 vehicles in the first six months of 2016, thus showing a much steeper rise compared to conventional car.

Read more: Overview of the Automotive Industry of Indonesia

The popular low multi-purpose vehicles in Indonesia include the Toyota Avanza, Daihatsu Xenia, Suzuki Ertiga, dan Honda Mobilio. On average, these car types all have price tags above IDR 180 million (approx. USD $14,000). The LCGCs, on the other hand, can be offered at cheaper rates as the manufacturers of these fuel-efficient cars have been given tax incentives from the government. One of requirements set by the government was that at least 85 percent of the LCGC components need to be sourced domestically.

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	85,012
February	86,486	103,278	111,824	88,740	88,250
March	87,917	95,996	113,067	99,410	93,990
April	87,144	102,257	106,124	81,600	84,600
May	95,541	99,697	96,872	79,375	88,537
June	101,746	104,268	110,614	82,172	91,471
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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