Indonesia car buyers defy predictions after new law implemented
Honda Prospect Motors, the distributor of Hondas in Indonesia, announced last Wednesday it had sold 7,410 units in June, its best monthly sales this year. It represents a 10 percent increase over Honda’s May sales and a more than threefold increase over the 2,165 units it sold in June 2011.
Indonesian subsidiary Suzuki Indomobil Sales announced it had sold 12,121 cars in June, a 25 percent increase over May and a 61 percent jump over last June.
Nissan Motor Indonesia, the Japanese automaker’s distributor in the archipelago, reported sales of 5,925 vehicles in June, helping Nissan achieve record sales in during the first half of 2012.
Experts initially feared a new government regulation would stunt Indonesia car sales. The law required Indonesian car buyers to make a 25 percent to 30 percent down payment on auto loans beginning on June 16. Consequently, the Association of Indonesian Automotive Industries (Gaikindo) cut its initial forecast of 1 million vehicle sales in 2012 to 850,000.
Higher than expected sales, however, are dispelling those concerns. In 2012, Indonesia car sales are already up 30 percent during the first half compared to the same period last year. Indonesians bought 534,876 vehicles from January to June, compared to the 417,672 units sold during the first six months of 2011.
“Since the beginning, I believed that the down-payment regulation would not have much impact on car sales,” Adrian Joezer, an analyst with Mandiri Sekuritas in Jakarta, told the Jakarta Globe. “Our people’s purchasing power is relatively strong and stable, so a down payment of 30 percent shouldn’t be a problem if they need to buy a car.”
Joko Trisanyoto, the marketing director of subsidiary Toyota Astra Motor, said that while the new laws may still diminish Indonesia car sales, he believed Indonesians could buy as many as 920,000 to 950,000 vehicles this year.
“Taking into account that many dealers were stocking up on inventory in anticipation of Idul Fitri in August, I believe car sales will continue to grow in the next two months,” Joko said, referring to celebrations at the end of the Muslim holy month of Ramadan, which typically sees a surge in the purchase of durable goods, including cars.
Category: Indonesia
