Automotive Industry of Indonesia; Domestic Car Sales Grew 8% Year-on-Year in First Half of 2023
Like with most sectors, the automotive sector of Indonesia received a wave of fresh air as most of the COVID-19-related social and business restrictions were scrapped by the government at the end of 2022. And, when the government also scrapped the vaccine-booster requirement for traveling into, and across, the country in June 2023 we can argue that the COVID-19 crisis is truly over.
And so, traffic congestion is back on the bustling streets of urban Indonesia. What it symbolizes is that economic and social activity is back to normal. This should imply that car sales are back on track too. Meanwhile, it is also worth pointing out that car sales form a key indicator to measure the state of purchasing power and consumer confidence because only when people are confident that their financial positions are safe enough (and stay safe on the medium-term future, in case a loan was obtained) they will spend heavily on a car (which is an expensive buy). With economic wheels back in motion, job opportunities (and stable incomes or revenue) have improved.
Based on recent data from the Association of Indonesian Automotive Manufacturers (Gaikindo), total car sales in Indonesia reached 502,536 in the first half of 2023, up 8.0 percent year-on-year (y/y) from the same period one year earlier. This is a good result, and also means that it remains possible for car sales to meet Gaikindo’s full-year target. Gaikindo’s sales target was set at 1.05 million vehicles for 2023 (with the sales being dominated by the multi-purpose vehicle and low-cost green car).
Meanwhile, wholesales (referring to car units being transported from the factories to the car dealers) reached 505,985 units in the first six months of 2023, which was a 6.5 percent (y/y) increase from one year earlier.
Top brands – both originating from Japan – are Toyota (the clear market leader) and Daihatsu. For both brands it is Astra International that owns the exclusive license to sell these brands on the Indonesian market. It gives Astra a 51.6 percent slice of the car market in Indonesia (31.2 percent through Toyota, and 20.4 percent through Daihatsu). In the case of Toyota, the best-sellers are Avanza, Innova, and Calya.
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