Car Manufacture
Indonesia' car sales slumped by 95.8 percent to 3,551 units in May compared to same month in 2019 still recorded 84,109 units, said the association on Monday (06/15) - Photo by Gaikindo

JAKARTA (TheInsiderStories) – An Indonesian Car Manufacturer Association (Gaikindo) sees this year’ national car sales will not be achieved cause low demand, tight competition, and influx of new players and variants from abroad, such as Wuling, Mitsubishi Xpander, and Nissan. Earlier, the organization predicted the car producers could sell 1.1 million units.

Gaikindo’ chairman Johannes Nangoi still optimistic the new car sales could reach 1 million units followed the political situation getting normal. He rated, during the General Elections and the effects of trade wars make the buyer cautious and hold their plan to buy the car.

The association reported, one of the most recent variants that Indonesian consumers are most like is Wuling. Chinese car producer’ sales grow 2 percent in the past year. Since disbursed in February 2019, the manufacturer have sold 980 units.

Meanwhile, Nissan still offers discounts of around 2 percent for the latest Livina and Serena products. Thus, the Mitsubishi still gave a discount of 1 percent of the Xpander variant in order to maintain market share. This discount war has influenced the car market sales in Indonesia.

From its latest released, until the first half of 2019 Indonesian vehicle industry has not been excited, where the car sales only reached 481,577 units, or 13 percent lower compared to the same period the previous year at 553,773 units.

According to Gaikindo, the decline in vehicle sales occurred in almost all brands. PT Astra International Tbk (IDX: ASII), an automotive company that controls 53 percent of the national vehicle market, for and example, recorded a 5.5 percent decrease in sales. While non-Astra vehicle brands, also corrected 20 percent, higher than the domestic average.

Astra’ biggest domestic vehicle sales are still occupied by Toyota with total sales of 155,139 units and Daihatsu in second place with sales of 87,023 units in the first semester of 2019. However, sales of the two brands fell 4.5 percent and 9.06 percent in the first half of 2019, respectively.

Three other brands that were also in the top five of national car sales also recorded a decline. Mitsubishi sales  dropped 9.7 percent followed by Honda 22.6 percent and Suzuki slipped 23.5 percent.

With these, Toyota still survive as a market leader with a share of over 30 percent of total national car sales. As for January-June 2019, Toyota has a market share of 32.2 percent.

According to analysts, car sales still have a change rise double digits if the economy grow by around 7 percent. They expect that throughout 2019, discount wars to drive car sales will decrease significantly because the producers are beginning to maintain their profit margins.

Astra International as the largest car manufacturer in Indonesia no longer aggressively, but takes the strategy by releasing the latest Avanza and Xenia models. The strategy proved to be quite successful because the company’ market share rose 53 percent in the first quarter of 2019, compared to the same period last year of only 49 percent.

To support the domestic car sales, Gaikindo supports the government’ plan to simplify the rules for importing electric cars which are considered to be able to open investment opportunities for electric cars entering Indonesia. By testing the electric car market in Indonesia, producers are expected to be interested in investing.

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