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.

Read more: Overview of the Automotive Industry of Indonesia

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):

 Month    Sold Cars
      2012
   Sold Cars
      2013
   Sold Cars
      2014
   Sold Cars
      2015
   Sold Cars
      2016
 January      76,427      96,718     103,609      94,194      85,012
 February      86,486     103,278     111,824      88,740      88,250
 March      87,917      95,996     113,067      99,410      93,990
 April      87,144     102,257     106,124      81,600      84,600
 May      95,541      99,697      96,872      79,375      88,537
 June     101,746     104,268     110,614      82,172      91,471
 July     102,511     112,178      91,334      55,615
 August      76,445      77,964      96,652      90,537
 September     102,100     115,974     102,572      93,038
 October     106,754     112,039     105,222      88,408
 November     103,703     111,841      91,327      86,938
 December      89,456      97,706      78,802      73,264
 Total    1,116,230
   1,229,916
   1,208,019    1,013,291

 

     2008    2009    2010    2011     2012     2013     2014     2015
Car Sales
(car units)
 607,805  486,061  764,710  894,164 1,116,230
1,229,916 1,208,019 1,013,291
Car Exports
(car units)
 100,982   56,669   85,769  107,932  173,368  170,907  202,273  207,691

Source: Gaikindo

Can Indonesia surpass Thailand as biggest SEA car hub in next five years?

Voting possible:  -

Results

  • 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

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