Meanwhile, domestic car sales stood at a total of 173,135 vehicles in the first two months of 2016, down 5.4 percent (y/y) from 182,934 sold cars in the same period one year earlier. Both Indonesia's car and motorcycle sales have been on the decline in recent years amid Indonesia's economic slowdown, declining purchasing power, and softer consumer confidence.

Indonesian Car Sales (CBU):

 Month    Sold Cars
   Sold Cars
   Sold Cars
   Sold Cars
   Sold Cars
 January      76,427      96,718     103,609      94,194      84,885
 February      86,486     103,278     111,824      88,740      88,250
Total     162,913     199,996     215,433     182,934

Source: Gaikindo

Pane is optimistic, however, about accelerating tire sales in Indonesia in the second half of the year, supported by the positive impact of the various economic policy packages that have been unveiled by the Indonesian government since late last year. These packages, if implemented in full, will boost Indonesia's economic growth and raise purchasing power. This will lead to higher car sales figures and subsequently raise domestic demand for tires.

Previously, the Indonesian Automotive Industry Association (Gaikindo) said it expects car sales in Indonesia to rise by about 5 percent (y/y) in 2016, after two consecutive years of falling car sales in the preceding two years.

Regarding tire exports, Pane estimates that Indonesia's export figure in 2016 will be rather similar to the figure posted last year (around 30 million units). In the 2011-2014 period Indonesia exported an average of approximately 45 million tire units per year.