Indonesian car sales slowing down to 90,403 units in August from previous year sold 102,197 units, or dropped by 11.5 percent - Photo by Carmudi

JAKARTA (TheInsiderStories) – Indonesian car sales dropped 15.36 percent to 81.218 in January 2019, the deepest since 2009. In the same period of 2018 the number of national vehicle sales reached 95,955 units.

Of which Astra’ production is 42,204 units, LCGC 11,540, and non-Astra 29,014 units. It is estimated that Astra’s total market share rose to 52 percent, while Astra LCGC 62 percent.

The Association of Indonesian Automotive Industries assessed that the decline in vehicle sales was a seasonal factor. Jongkie D. Sugiarto, the chairman of the association said still calculating what the main factor of the declining.

But, he stressed that, the organization would not revise the 2019 sales target. He Still optimistic total car sales in this year could reach 1.1 million units.

According to official data, almost all brand-name sole agents  experienced a decline in sales during that period, starts from 1 to 28 percent. In January 2018 car sales rose 11.2 percent compared to previous year, in January 2017 rose 1.5 percent, January 2016 recorded a decrease of 9.8 percent and January 2015 fell 9.1 percent.

Previously, Coordinating Minister for Economic Affairs Darmin Nasution said, the government will support the car sales of Indonesian producer by simplify the export procedures. While, Industry Minister Airlangga Hartarto stated, the government would help the continues to set for increased investment in the manufacturing industry to boost national economic growth.

For this reason, a policy instrument is needed that can attract or stimulate investment in Indonesia. The ministers assured that the government has committed to creating a conducive investment climate, among others through the provision of fiscal incentives, single submission online implementation, and ease of business licensing. In addition, it is necessary to reduce benchmark interest rates, improve the logistics system, and simplify export procedures.

This year there will be two global scale companies in the automotive sector from Europe and Asia that will invest US$900 million. With the inclusion of these two companies, it will increase the capacity of the automotive industry in Indonesia which is targeted to be able to produce as many as 2 million units of cars per year.

In addition, the government also continues to encourage domestic automotive manufacturers to realize the development of low emission vehicles as an effort to develop electric energy-based vehicles in Indonesia.

Then, data from the Association of Indonesian Automotive Industries showed that the completely built up (CBU) exports throughout 2018 grew 14.44 percent to 264,553 units compared to the previous year. This achievement is the highest of previous years.

The number of CBU exports is projected to continue to increase in line with the application of the policy of the Director General of Customs and Excise Regulation No. 01 of 2019 concerning CBU Motorized Vehicle Export Procedures that enforced by Feb. 1, as previously stated.

Meanwhile, car exports in the form of completely knock down are around 82 thousand units, bringing the total to more than 346 thousand units with a value of $4 billion and an additional from automotive component exports valued at $2.6 billion.

In 2019, the government targets CBU car exports to reach 400,000 units, up 51.2 percent on an annual basis. Some of the countries that are the destination of exports are the Philippines, Cambodia, Vietnam and several countries in Latin America such as Peru.

Written by Daniel Deha, Email: daniel@theinsiderstories.com