Astra International, among the biggest diversified conglomerates in Indonesia, plans to distribute a total of IDR 6.8 trillion (approx. USD $511 million) worth of dividend for financial year 2016 to its shareholders, about 45 percent of the company's total net profit (slightly below the 50 percent payout ratio in the preceding year). Astra's 2016 dividend involves final dividend of IDR 113 per share and interim dividend of IDR 55 per share (hence total dividend of IDR 168 per share).

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Passenger car sales in Indonesia are estimated to rise 11.5 percent per year in the 2017-2021 period supported by Indonesia's expanding middle class. This conclusion originates from research that was conducted by London-based BMI Research. Meanwhile, business consulting firm Frost and Sullivan sees Indonesian car sales rise 5 percent (y/y) to 1.11 million vehicles in 2017 supported by the popular low cost green cars and multipurpose vehicles.

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Automotive manufacturer Toyota Motor Corporation already realized 70 percent of its total of IDR 20 trillion (approx. USD $15 billion) worth of investment commitments in Indonesia. Japan-based Toyota will materialize its investment commitments gradually up to 2019. Warih Andang Tjahjono, Vice President Director at Toyota Motor Manufacturing Indonesia (TMMI), said his company invested IDR 10 trillion in late-2016, both in the form of a capital injection and for additional production facilities.

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Indonesia's car sales rose 3.7 percent year-on-year (y/y) to 974,972 vehicles in the first 11 months of 2016, improving from 940,027 sold vehicles in the same period one year ago. Jongkie Sugiarto, Chairman of the Indonesian Automotive Industry Association (Gaikindo), said this year's rising car sales in Indonesia are primarily supported by the launch of various new vehicles. He added Gaikindo's 2016 car sales target of 1.05 million could still be achieved, provided December's car sales will be more than 75,000 units.

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Car sales in Indonesia rose 4 percent year-on-year (y/y) to 91,846 units in October 2016 compared to 88,408 vehicles in the same month one year earlier. Growth is attributed to the stabilizing economy of Indonesia and the launch of several new car models (that managed to entice consumers). New data from the Indonesian Automotive Industry Association (Gaikindo) show that Indonesia's car sales totaled 874,703 units in the first ten months of 2016, up 2.5 percent (y/y) from 853,089 cars in the same period one year ago.

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Car sales in Indonesia grew 2.4 percent to around 783,000 vehicles in the first nine months of 2016 from 764,000 units sold in the same period one year earlier. Improving car sales this year are attributed to the launch of new low cost green car (LCGC) models - including the Toyota Calya and Daihatsu Sigra - at the Gaikindo Indonesia International Auto Show 2016, held between 11-21 August 2016 near Jakarta. Demand for both models, distributed by the Astra Group, is high, reflected by the two-month waiting list.

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Indonesia’s exports of cars and components reached a value of USD $552.6 million in August 2016, up 50.3 percent (m/m) from USD $368.3 million in the preceding month when many countries celebrated Idul Fitri (marking the end of the holy Ramadan month). According to data from Statistics Indonesia (BPS), Indonesia exported a total of USD $3.72 billion worth of cars and components in the first eight months of 2016, up 1.5 percent on a year-on-year (y/y) basis. Jongkie Sugiarto, Chairman of the Indonesian Automotive Industry Association (Gaikindo), said rising car exports from Indonesia continue the positive performance that was recorded last year.

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Nissan Motor Indonesia (NMI), the Indonesia-based local unit of Japanese multinational automobile manufacturer Nissan Motor Company Ltd, started construction of a new engine and transmission parts plant in Purwakarta (West Java). The plant, which will be constructed at NMI's existing facilities in Purwakarta, covers 3,000 of square meters in size and requires an investment of around IDR 435 billion (approx. USD $33.2 million). The plant is designed to have a production capacity of 96,000 units per year.

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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.

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Car sales in Indonesia grew 11.4 percent (y/y) to 91,471 units in June 2016. Henry Tanoto, Vice President Director of Toyota Astra Motor (TAM), said the increase in car sales is supported by people's eagerness to purchase a car ahead of the Idul Fitri holiday (4 - 8 July 2016). A portion of the population buys a (new) car before going on "mudik" (a term that refers to the traditional journey made by city dwellers back to their places of origin to spend a couple of days with their families during the Idul Fitri holiday, the holiday that marks the end of the Islamic fasting month).

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Amid Indonesia’s slowing economic growth as well as looming higher prices of subsidized fuels (which will cause accelerated inflation and declining purchasing power), domestic car sales in Indonesia have fallen 6.3 percent to 104,916 units in October 2014 from the same month last year according to preliminary data from the Indonesian Automotive Industry Association (Gaikindo). Cumulatively, car sales reached 1.04 million units in the first ten months of 2014, a slight 1.6 percentage point increase from the same period last year.

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After Indonesian President Joko Widodo and Vice President Jusuf Kalla have confirmed that prices of subsidized fuels (gasoline and diesel) will be raised in November 2014 in an attempt to ease the country’s wide current account deficit and government budget deficit (which are primarily caused by costly oil imports), domestic car manufacturers and dealers are expected to post declining earnings in 2015. Besides the subsidized fuel price issue, Indonesia’s car industry is also negatively impacted by the country’s slowing economic growth.

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Car sales in Indonesia declined 8 percent to 98,198 units in May 2014 from 106,811 units in the previous month. The Indonesian Automotive Industry Association (Gaikindo) said that the decline was the direct consequence of several public holidays (International Labour Day and the commemorations of Buddha’s birthday as well as ascensions of Prophet Muhammad and Jesus Christ). These holidays caused a lower car production rate and a reduced number of car deliveries to wholesale dealers.

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Despite higher car prices due to the depreciating rupiah exchange rate, domestic car sales in Indonesia rose 11 percent to 107,496 in January 2014 compared to the same month last year. January sales were particularly supported by sales of the low cost green car (LCGC) and low multipurpose vehicle (LMPV). Both these car types enjoy high popularity in Indonesia. In 2013, the Indonesian government provided tax incentives for the establishment of a domestic LCGC industry.

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Indonesia's automotive industry experienced some drastic changes in recent years. Originally regarded as a mere production hub due to cheap productions costs (particularly wages), it changed into a major car sales market as per capita GDP continues to grow and gives rise to an expanding middle class. Since 2011, domestic car sales in Indonesia have reached record highs and given that the country's per capita car ownership is still relatively low, there is room for more growth. But Indonesia is also eager to become an important car exporting country.

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In 2014, Indonesia is expected to see capital inflow of between USD $1 billion and USD $1.5 billion of funds for investments in the country's car components industry. About 20 to 30 companies are eager to expand or start business in this sector of Southeast Asia's largest economy (each investing about USD $50 million). Indonesia's car industry is attractive due to record high car sales in recent years (triggered by strong domestic GDP per capita growth) as well as double-digit export growth (although coming from a low base).

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Indonesian car sales have already exceeded the one million mark in October 2013. In the January-October period, 1,018,786 car units were sold, a ten percent increase compared to car sales in the same period last year. Growing demand for cars in Indonesia indicates that this sector of Southeast Asia's largest economy is not influenced by current negative market sentiments, such as the sharply depreciated Indonesian rupiah exchange rate (against the US dollar), high inflation (8.32 percent yoy in October 2013), and slowing economic growth.

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General Motors Company (GM), the American multinational holding corporation that engages in the automotive industry, aims to expand its partnership with China's SAIC Motor Corp by joining hands to enhance business activities in Indonesia. Recently, speculation emerged that both companies were drifting apart. However, both camps claim that the relationship has never been better. In fact, GM China and SAIC are opening four new plants in China which will add 1 million cars (per year) to the current production capacity of 3 million vehicles.

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Car sales in Indonesia are expected to exceed the target set by the Indonesian Automotive Industry Association (Gaikindo) in 2013. The institution originally set a target of 1.1 million sold car vehicles in 2013, which is similar to the sales result in 2012. However, in September 2013 car sales recorded a new monthly record (115,921 sold units) after consumers sped up car sales as prices will increase in October. Up to the third quarter of 2013, total car sales have increased 11.2 percent compared to the same period last year.

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In recent years, Indonesia's car sales have shown robust growth, culminating in a record high number of 1.12 million sold car units in 2012. This is an important statistic because car sales inform us about the state of the economy. Generally, rising car sales indicate an expanding economy while declining car sales indicate that the economy is slowing down. When we take a look at the table below, there is a link visible between Indonesia's GDP growth and rising car sales, except for 2011 to 2012 when GDP growth declined while car sales rose.

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