According to data from the Indonesian Automotive Industry Association (Gaikindo), domestic car sales in Indonesia rose 13 percent to 109,706 car units in June 2014 from the previous month (97,147 vehicles) as people increased car purchases ahead of the Idul Fitri (Lebaran) festivities, which commence after the holy fasting month of Ramadan has ended on 28 July. Idul Fitri involves the exodus of millions of Indonesians from the cities to their places of origin. Ahead of this celebration, car sales always increase.
Almost all car brands posted higher sales in June 2014, led by Daihatsu (30 percentage point growth month-to-month to 15,291 sold units), Toyota (23 percentage point growth to 39,000+ sold units) and Mitsubishi (7.5 percentage point growth to 11,398 units). Higher car sales, particularly the multipurpose vehicle (such as such as the Toyota Avanza and Kijang Innova), were also supported by the absence of public holidays in June (contrary to the months of May and July), implying that there were no disturbances in distribution of cars to wholesale and retail sale dealers.
In the first half of 2014, car sales have reached 641,511 units, a 6.17 percentage point growth from the same period last year. Gaikindo still targets total domestic car sales of 1.2 to 1.3 million units, a slight improvement of 1.2 million car sales in 2013. Despite a slowing economy (+5.21 percent year-on-year in Q1-2014), partly inflicted by a higher interest rate environment (Indonesia’s central bank gradually increased its benchmark interest rate from 5.75 percent to 7.50 percent last year), a weaker rupiah exchange rate and higher inflation, Indonesian car sales have remained at record high levels because of the launch of various new car models and the successful introduction of the low cost green car (LCGC) in late 2013.
Gaikindo official Jongkie Sugiharto said that Indonesians’ purchasing power remains strong with +5 GDP growth. Only when Indonesia’s economic expansion declines to 1 percent (yoy), then the car industry will experience a sharp slowdown.
Indonesian Car Sales (CBU):
|Month||Sold Cars 2012||Sold Cars 2013||Sold Cars 2014|
|Indonesia's Car Sales
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(number of car units)
¹ future forecast