President Joko Widodo Talked with Automotive Players in Gaikindo Indonesia Indonesian car maker association (GAIKINDO) sees the car sales in May will remains weak due to lack of demand, said the chairman on Monday (05/18) - Photo by President Office

JAKARTA (TheInsiderStories) – Indonesian car maker association (GAIKINDO) sees the car sales in May will remains weak due to lack of demand, said the chairman on Monday (05/18). Last month, the national car sales only 7,871 units or dropped dramatically by 90.6 percent compared to April 2019 which reached 84,056 units.

According to the chairman, Yohannes Nangoi, the biggest factor on the sharp attenuation was caused the four-wheel were not the primary needs of the people in the current COVID-19 pandemic. He stated, “We are worried that in May this will be a bit more severe, with a figure of around under 8,000 units.”

Earlier, the association has revised down the automotive sales from initially 1.03 million units to 600,000 units due to virus impact. This endless outbreak caused several car manufacturers to temporarily halt the production caused the low supply of raw materials for the next few months.

Some car producers such as Wuling, Honda and Suzuki have announced that the factory has stopped temporarily due to the virus spread. Wuling factory in Bekasi, West Java has a production capacity of up to 120,000 units per year.

Then, PT Honda Prospect Motor’ plant in Karawang, West Java, have a annually capacity production of 200,000 units has stop operating for 14 days. The drop in production will also be experienced by PT Astra Daihatsu Motor.  According to the marketing director, Amelia Tjandra, the manufacturing production activities are carried out one shift with working hours lower than usual.

She estimates that the realization of Daihatsu’ production could decrease by more than 40 percent compared to the normal conditions produce up to 530,000 cars a year. While, Ernando Demily, president director of PT Isuzu Astra Motor Indonesia with new sales forecast changes. However, He optimistic that there is still an opportunity to grow the commercial market segments amid the pandemic.

To support the automotive industry, recently industry minister, Agus Gumiwang Kartasasmita said, his office has proposed economic stimulus to press the COVID-19 impact in Indonesia. This policy was made to maintain the performance of the industry’ contribution to the national economy.

“Although there are automotive manufacturers whose production has been disrupted due to COVID-19, we ensure the availability of products and parts for motor vehicles,” said director at the ministry of industry, Putu Juli Ardika in Jakarta, in an official statement on April 8.

According to him, his office has proposed fiscal, non-fiscal, and monetary stimulus to the related ministry and agencies on the new policies. In detail, the fiscal stimulus is in the form of incentives income tax for six months, value added tax refunds also for six months, and a reduction in import duties.

“Non-fiscal stimulus is given in the scheme of simplifying or reducing export and import for raw materials, accelerating the export-import process for reputable traders, and simplifying the import-export process through NLE (National Logistic Ecosystem),” he explained.

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