Combined, in the first eight months of 2015 Indonesian car sales stood at 671,183 vehicles, down nearly 20 percent from the same period last year, indicating a sharp slowdown in the country’s car industry. People’s purchasing power has declined due to the country’s slowing economic growth (in the second quarter of 2015 Indonesia’s GDP growth slowed to a six-year low) and high inflation. The weak rupiah, which has depreciated nearly 15 percent against the US dollar so far in 2015, causes imported inflation (as many car components still need to be imported) hence making cars more expensive in Indonesia. Indonesia’s economic slowdown is partly caused by weak commodity markets. Low prices of palm oil, coal and other commodities cause sluggish car sales in the country’s mining and plantation regions on the islands of Sumatra and Kalimantan.

Gaikindo Deputy Chairman Yohannes Nangoi stated that the nation’s car sales will continue to decline if commodity prices remain low. Gaikindo already cut its forecast for Indonesian car sales in 2015 twice from an initial 1.2 million cars to 1.1 million, and then to the range of 950 thousand - 1 million.

Car sales are a key indicator for the economy as it provides valuable information about consumer confidence and purchasing power. Declining car sales are therefore a bad sign for the economy, particularly given Indonesia's still low per capita car ownership ratio (less than four percent of the population owns a vehicle).

Indonesian Car Sales (CBU):

 Month    Sold Cars 2012    Sold Cars 2013    Sold Cars 2014    Sold Cars 2015
 January           76,427           96,718          103,609           94,194
 February           86,486          103,278          111,824           88,740
 March           87,917           95,996          113,067           99,408
 April           87,144          102,257          106,124           81,600
 May           95,541           99,697           96,872           79,375
 June          101,746          104,268          110,614           82,171
 July          102,511          112,178           91,334           55,618
 August           76,445           77,964           96,652           90,077
 September          102,100          115,974          102,572
 October          106,754          112,039          105,222
 November          103,703          111,841           91,327
 December           89,456           97,706           78,802
 Total         1,116,230
        1,208,019          671,183

Source: Gaikindo