Car & Motorcycle Sales in Indonesia Continue to Fall

Jongkie Sugiarto, Chairman of the Indonesian Automotive Industry Association (Gaikindo), believes the slight increase in retail car sales is a sign that people's purchasing power has improved at the start of the year. Regarding the lower wholesales, he commented that it is a strategy to maintain healthy car stockpiles as these had been accumulating at the end of 2015 amid reduced demand for cars. Since 2013 Indonesian car sales have been declining due to weakened purchasing power amid the country's economic slowdown, high inflation (until late-2015) and high borrowing costs.

As Indonesia's economic expansion is expected to accelerate in 2016 (after six years of slowing economic growth), Sugiarto expects to see rising car sales in Southeast Asia's largest economy in 2016. However, the increase in car sales may be limited to below 5 percent (y/y) from 1.01 million sold vehicles last year.

In the first month of 2016 Toyota - as expected - remained the most popular vehicle in Indonesia. Total (retail) Toyota sales reached 25.382 units in January 2016, up 12.5 percent from 22,555 units in the same month last year. The dominant position of Toyota (and other Japanese brands) in Indonesia's automotive sector was the reason behind American car manufacturer Ford Motor Company's decision to close all its operations in Indonesia.

Indonesian Car Sales (CBU):

Month	Sold Cars       2012	Sold Cars       2013	Sold Cars       2014	Sold Cars       2015	Sold Cars       2016
January	76,427	96,718	103,609	94,194	84,885
February	86,486	103,278	111,824	88,740
March	87,917	95,996	113,067	99,410
April	87,144	102,257	106,124	81,600
May	95,541	99,697	96,872	79,375
June	101,746	104,268	110,614	82,172
July	102,511	112,178	91,334	55,615
August	76,445	77,964	96,652	90,537
September	102,100	115,974	102,572	93,038
October	106,754	112,039	105,222	88,408
November	103,703	111,841	91,327	86,938
December	89,456	97,706	78,802	73,264
Total	1,116,230	1,229,916	1,208,019	1,013,291

^{Source: Gaikindo}

Motorcycle Sales in Indonesia

Meanwhile, motorcycle sales in Indonesia declined in January 2016. According to the latest data from the Indonesian Motorcycle Industry Association (AISI) motorcycle sales fell 17.2 percent (y/y) to 416,263 in the first month of 2016. Sigit Kumala, Head of the commercial department within the AISI, said motorcycle sales fell as local manufacturers curbed output amid a large amount of existing motorcycle stockpiles.

Kumala is optimistic that Indonesia's motorcycle sales will improve in 2016 on the back of improving purchasing power in Indonesia.

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