30 March 2020 (closed)
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Sales of low cost green cars (LCGCs) are estimated to boom in Indonesia this year, supported by the launch of the Toyota Calya and Daihatsu Sigra. These multi-purpose vehicles are expected to become popular on the Indonesian market as they are relatively cheap (in the range of IDR 110 - 150 million) and have a maximum passenger capacity of seven people. According to analysts the LCGC will control 20 percent of Indonesia's car sales market before the year-end. Especially, first-time car buyers show a preference for the LCGC.
The LCGC has become a popular vehicle in Indonesia, Southeast Asia's largest economy where the low per capita car ownership rate implies that there exists a potentially significant portion of first-time car buyers, most of whom have limited cash and can therefore not afford the more expensive conventional vehicle. Since the LCGC was introduced on the Indonesian market in late-2013, demand has been solid and rising. Currently, the LCGC commands a 16.7 percent market share in Indonesia's car sales market. However, this figure is expected to rise to 20 percent before the year-end due to the launch of new LCGC models.
For example, since the launch of the Toyota Calya and Daihatsu Sigra on 2 August 2016, more than 6,000 orders were placed for these cars (nearly two-thirds of which were orders for the Toyota Calya vehicle). Orders are expected to rise further as both models are highlighted at the 2016 Gaikindo Indonesia International Auto Show (GIIAS), held between 11 - 21 August 2016 in Serpong (Banten). This event is estimated to boost overall car sales in Indonesia in the second half of the 2016.
According to data from the Indonesian Automotive Industry Association (Gaikindo), Indonesia's car sales rose 11.4 percent (y/y) to 91,471 units in June 2016. Meanwhile, Indonesian car sales stood at a total of 531,860 units in the first half of 2016, up 1 percent (y/y) only from car sales in the same period one year earlier, showing that Indonesia's purchasing power and consumer confidence have only grown slightly over the past year. Gaikindo targets to see car sales grow between 5 - 10 percent (y/y) to 1.1 million vehicles in full-year 2016.
LCGC sales rose 10 percent (y/y) to 89,000 vehicles in the first six months of 2016, thus showing a much steeper rise compared to conventional car.
The popular low multi-purpose vehicles in Indonesia include the Toyota Avanza, Daihatsu Xenia, Suzuki Ertiga, dan Honda Mobilio. On average, these car types all have price tags above IDR 180 million (approx. USD $14,000). The LCGCs, on the other hand, can be offered at cheaper rates as the manufacturers of these fuel-efficient cars have been given tax incentives from the government. One of requirements set by the government was that at least 85 percent of the LCGC components need to be sourced domestically.
Indonesian Car Sales (CBU):
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Can Indonesia surpass Thailand as biggest SEA car hub in next five years?
Voting possible: -
- Yes, but more incentives from government are needed to attract investment (60.3%)
- Yes, it will not even require additional efforts, it just needs time (17.6%)
- No, Thailand's automotive industry is too strong (17.6%)
- I don't know (4.4%)
Total amount of votes: 68