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Indonesian car sales dropped by 48.35 percent during 2020 depressed by the COVID-19 pandemic - Photo: Special

JAKARTA (TheInsiderStories) – Indonesian car sales dropped 10.8 percent during 2019 amid the weak demands and other factors. The car manufacturer association (Gaikindo) reported, last year the producer only sold 1.03 million units from a year ago 1.15 million cars.

In December only, the manufacturer sold 86,582 cars, lowered compared to November 90,798 units and from a year ago 87,846 vehicles. The market leader was still controlled by Toyota, which was able to record sales of 333,222 units, followed by Daihatsu 177,284 units, and Mitsubishi at the third position by posting 161,765 units of sales.

Earlier, Gaikindo has predictef the 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.

According to the analysts, car sales still have an opportunity to rise double digits if the economy grow by around 7 percent. They expect that throughout 2020, discount wars will decrease significantly because the producers are beginning to maintain their profit margins.

Currently, PT Astra International Tbk (IDX: ASII), 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 maintained in 52 percent level.

To support the domestic car sales, Gaikindo appreciated the government’ initiative to simplify the rules for importing electric cars which are considered to be able to open investment opportunities entering Indonesia.

President Joko Widodo has signed the electric vehicle rule to help the automotive industry. In addition, the government has supported the manufacturer by give more incentives for exporters. The procedure simplification its expect could improve Indonesian export and slender trade balance deficit.

Reportedly, that the trend of exports and imports of Indonesian motor vehicles continued to show an improvement in the past five years. In 2014, exports were recorded at 51.57 percent and imports amounted to 48.43 percent. In 2015, exports reached 55.40 percent and imports amounted to 44.60 percent.

Furthermore, in 2016 total exports amounted to 61.40 percent and imports amounted to 38.60 percent. Then, in 2017, exports were recorded at 53.16 percent and imports amounted to 46.84 percent. Finally, in 2018, exports were recorded at 63.56 percent and imports by 36.44 percent.

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