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30 July 2021 (closed)
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Indonesia’s exports of cars and components reached a value of USD $552.6 million in August 2016, up 50.3 percent (m/m) from USD $368.3 million in the preceding month when many countries celebrated Idul Fitri (marking the end of the holy Ramadan month). According to data from Statistics Indonesia (BPS), Indonesia exported a total of USD $3.72 billion worth of cars and components in the first eight months of 2016, up 1.5 percent on a year-on-year (y/y) basis. Jongkie Sugiarto, Chairman of the Indonesian Automotive Industry Association (Gaikindo), said rising car exports from Indonesia continue the positive performance that was recorded last year.
However, this growth is primarily supported by exports of completely knocked down (CKD) units as well as exports of car components. Exports of completely built up (CBU) units, on the other hand, have been on the decline.
In the January-August 2016 period, Indonesian exports of CKD units grew around 51 percent (y/y) to 108,770 units from 72,026 units in the same period one year earlier, a very impressive performance, while exports of car components rose 12.5 percent (y/y) to 3.55 million parts over the same period. However, exports of CBU vehicles actually fell 12.1 percent (y/y) to 106,089 units in the January-August 2016 period.
Sugiarto said foreign demand for CBU units has declined so far this year in line with sluggish global economic growth. Indonesia’s biggest export markets for cars and components are the Middle East and other Asian countries. Although Indonesian exporters are advised to diversify their export markets in order to experience a less volatile export performance, this is not an easy task as there is a lot of competition from other car exporting countries such as Thailand or Japan.
Although Indonesia’s exports of CBU units have disappointed so far this year, I Made Dana Tangkas, Director of Toyota Motor Manufacturing Indonesia (TMMIN), remains optimistic that CBU exports can surpass the 207,891 figure that was recorded in full-year 2015. In fact, stakeholders still expect to see a 10 percent (y/y) growth figure at the end of 2016.
Tangkas detects an interesting new trend with regard to Indonesia’s car and component exports. As Indonesia’s CBU exports have risen steadily in recent years, many of these cars – driving on the streets of foreign countries – now need to have some of their components replaced. This explains why Indonesia’s car components have been on the rise recently. Meanwhile, as sluggish global economic growth undermines people’s purchasing power in Indonesia’s key (car) export markets, foreigners tend to replace components rather than buying a new car.
Read more: Overview of Indonesia's Automotive Industry
Indonesian Car Sales (CBU):