Indonesia Investments wishes all Muslims a happy & generous Ramadan
25 May 2018 (closed)
USD/IDR (14,166) -39.00 -0.27%
EUR/IDR (16,582) -47.80 -0.29%
Jakarta Composite Index (5,975.74) +29.20 +0.49%
Based on the latest data from the Association of Indonesian Automotive Industries (Gaikindo), automotive sales in Indonesia rose 2.6 percent year-on-year (y/y) to 94,461 vehicles in October 2017 on the back of rising demand for commercial vehicles. Growing demand is boosted by recovering coal and crude palm oil (CPO) prices.
So far this year (January-October 2017), a total of 898,218 cars have been sold in Indonesia, the largest car market in Southeast Asia. The figure is only a modest 2.5 percent (y/y) increase from the nation's car sales figure in the same period one year earlier, hence Gaikindo's full-year 2017 car sales target may not be achieved.
Gaikindo targets to see 1.1 million car sales in Indonesia in full-year 2017. This would imply a 4 percent jump from car sales in 2016 (when a total of 1,061,859 car units were sold). More likely, Indonesian car sales will reach a figure of 1.07 million at the year-end.
Meanwhile, in the ASEAN region, car sales have risen at a higher pace in the third quarter of 2017. According to data from the ASEAN Automotive Federation, car sales in this region rose 5.8 percent (y/y) to 821,573 units in July-September 2017. The rise was attributed to an improving economy and stable politics in the ASEAN region. These factors managed to boost consumer confidence, hence resulting in rising car sales. The launch of new car models may also have contributed.
Within ASEAN, Indonesia is the biggest car market, followed by Thailand and Malaysia. However, in terms of production, Thailand is the clear leading nation within ASEAN.
Yohannes Nangoi, General Chairman of Gaikindo, said there is still ample room for long-term growth of the car industry in Indonesia as the nation's per capita car ownership figure is very low. Currently, only eight out of every 100 Indonesians own a car (versus a 24:100 ratio in Thailand and 40:100 ratio in Malaysia). Provided per capita GDP continues to rise, then there should emerge rapidly rising demand for cars in the future.
Meanwhile, Indonesia's installed annual car production capacity now stands between 2.0 - 2.2 million vehicles. Considering only around 1.1 million cars are sold domestically, while only around 200,000 cars are exported from Indonesia, these automotive plants in Indonesia cannot work at full capacity yet.
Indonesian Car Sales (CBU):