Indonesian Car Sales Rise due to Discount Actions but May Fall in 2013
A discount war ahead of Lebaran, the traditional celebration that follows after the holy fasting month of Ramadan is finished and when many Indonesians go back to their place of origin for a few days, is expected to spur car sales in July. It is a normal phenomenon that car sales increase ahead of Lebaran because an amount of people need a new car to carry them back to their places of birth. But this year the increase in car sales is expected to exceed sales figures in previous years as wholesalers use discount actions to reduce their car stockpiles.
Car sales in July 2013 are expected to reach around 110,000 car units, which would imply a 7.3 percent rise compared to car sales in July 2012.
Indonesia's Car Sales 2013:
The discount actions have been in progress for most of this year and are expected to continue after Lebaran. Sales figures need this boost because Indonesia's economy is growing at a slower pace with gross domestic product (GDP) at 5.9 percent in Q2-2013. Moreover, inflation is on the rise after the government increased the price of subsidized fuels last month and might reach up to eight percent this year. And if the weakening rupiah continues its downward trend compared to the US dollar then interest rates will increase and subsequently lead to the end of the discounts. At this moment, Indonesia's Automotive Industry Association (Gaikindo) still expects the total number of sold car units to be similar to last year's result, when 1.1 million cars were sold. But if interest rates will rise, then the association will revise its forecast.
|Indonesia's Car Sales
(number of car units)
In the first six months of 2013, 601,952 cars were sold in Indonesia. This is a 12.5 percent increase compared to the 535,261 sold units in the first six months in 2012. Toyota is the traditional market leader in terms of sold car units. This Japanese brand is distributed by Astra International, Indonesia's largest company by market capitalization.
|Car Brand|| Jan - June
| Market Share