Low Cost Green Car Boosts Indonesia's 2016 Car Sales

Due to the warm response of the market for the new LCGC vehicles, Astra International's market share in Indonesia's automotive market has grown to 54 percent (from 50 percent in 2015).

Jongkie Sugiarto, Chairman of the Indonesian Automotive Industry Association (Gaikindo), informed that car sales in Indonesia are much better this year compared to 2015 and therefore he is optimistic that Gaikindo's 2016 target can be achieved. In full-year 2016, Gaikindo targets to see Indonesian car sales rise by 5 percent year-on-year (y/y) to 1.05 million vehicles.

He mentioned that there are three factors that push Indonesia's car sales higher this year. Firstly, the macroeconomic environment of Indonesia has improved. In 2015 gross domestic product (GDP) of Indonesia expanded 4.7 percent (y/y). This year domestic and international institutions see Indonesia's GDP growing in the range of 4.9 - 5.1 percent, effectively ending the economic slowdown that occurred in the years 2011-2015. Higher economic growth boosts people's purchasing power and therefore demand for cars is rising.

Secondly, Gaikindo has been enthusiastically organizing car shows in Jakarta, Surabaya and Makassar this year, hence attracting more car buyers, particularly men. Lastly, new LCGC vehicles - launched this year - have boosted car sales in Southeast Asia's largest economy. The LCGC are affordable and fuel efficient cars that were introduced to the Indonesian market in late-2013 after the central government offered tax incentives to those car manufacturers that meet the requirements regarding fuel efficiency targets. Since the launch nearly three years ago, these LCGCs gained popularity in Indonesia's car market, currently accounting for nearly 20 percent of total Indonesian car sales.

Read more: Overview of Indonesia's Automotive Industry

The multipurpose vehicle (MPV) and sport utility vehicle (SUV) are - by far - the most popular vehicle types in Indonesia as they can carry up to seven passengers. These car types make it easier for families to go traveling together.

In September 2016 a total of 92,000 cars were sold in Indonesia, down 0.5 percent compared to car sales in the same month last year, according to the latest data from Gaikindo.

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	85,003
February	86,486	103,278	111,824	88,740	88,208
March	87,917	95,996	113,067	99,410	94,093
April	87,144	102,257	106,124	81,600	84,771
May	95,541	99,697	96,872	79,375	88,578
June	101,746	104,268	110,614	82,172	91,492
July	102,511	112,178	91,334	55,615	62,603
August	76,445	77,964	96,652	90,537	96,294
September	102,100	115,974	102,572	93,038	±92,000
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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