Car Sales Indonesia Update: Falling on Weak Purchasing Power
Car sales in Indonesia continued to decline in September 2015. Based on the latest data from the Indonesian Automotive Industry Association (Gaikindo), a total of 92,478 vehicles were sold in Southeast Asia's largest economy in September, down 9.8 percent from sales in the same month last year. Indonesian car sales have been slowing since the all-time sales peak in 2013 amid the country's easing economic growth pace (triggering weaker purchasing power).
Car sales are an important indicator to measure the condition of a local economy as these sales provide valuable information about people's consumer confidence and purchasing power. Generally, declining car sales and declining economic growth go hand in hand. Indonesians' purchasing power is also curbed by the country's high inflation rate. Over the past two years, Indonesian inflation has been high due to subsidized fuel price reforms as well as imported inflation due to the weak rupiah. In September 2015 inflation stood at 6.83 percent (y/y), down from 7.18 percent (y/y) in the preceding month. Toward the year-end, inflation is expected to ease more markedly (to between 4 - 5 percent) as the impact of the November 2014 subsidized fuel price hike wanes.
Economic Growth and Car Sales Statistics Indonesia:
(in billion USD)
(annual % change)
|GDP per Capita²
(in million units)
¹ indicates a forecast
² the base year for computing the economic growth rate shifted from 2000 to 2010 in 2014, previous years have been recalculated
Sources: World Bank & Gaikindo
In the first nine months of 2015, Indonesian car sales stand at a total of 764,119 units, down 18.1 percent from cars sold in the same period last year (932,458 vehicles).
Despite the slowdown, Deputy Chairman of Gaikindo Jongkie Sugiarto was pleased to see the nation's September car sales and hopes to see solid sales in the remainder of the year. However, Gaikindo has already cut its forecast for 2015 car sales twice, from an initial 1.2 million to 1.1 million, and then to the range of 950,000 - 1,000,000 cars.
Indonesian Car Sales (CBU):
|Month||Sold Cars 2012||Sold Cars 2013||Sold Cars 2014||Sold Cars 2015|