The Indonesian vehicle market expanded 50.6% year-on-year in October to 31,260 units, according to data released by PT Toyota Astra Motor – the Japanese manufacturer’s local distributor and the country’s local compiler of auto sales statistics.
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The market has grown for 15 straight months, since the Bank of Indonesia began its rate-cutting cycle – from 12.75% in July 2006 to 8% at present.
Compared with September, however, sales volumes dropped sharply – by 24%, reflecting the fewer working days during the month due to the annual Idul Fitri holidays. But underlying demand trend remains strong, with cumulative sales for the 10 months rising 37.3% to 349,489 units compared with 254,505 a year earlier.
The government last week revealed that economic growth had accelerated in the third quarter, with GDP growth at 6.5% year-on-year, helped by high agricultural output and strong export revenue growth. It remained optimistic that short term growth will continue at current levels, at least, despite mounting concerns over high oil prices. It forecasts GDP growth of 6.3% for the whole of 2007, rising to 6.8% next year.
Total vehicle sales are expected to reach 415,000 units in 2007.
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By GlobalDataThe record-high oil prices are indeed a concern and the government has revealed it is considering measures to limit their effects, including limits on purchases of subsidised fuel to private car owners. This would help limit the spiralling cost of fuel subsidies, estimated to be 40% over budget this year at $US9.75bn.
Thailand’s vehicle market is also beginning to show signs of recovery, with sales reaching 57,860 units in October – 12.6% more than a year earlier. Cumulatively, however, sales were 5.7% down in the January-October period at 509,186 units – with passenger car sales down 6.1% to 144,454 units and one ton pickup trucks down 9.3% to 319,532.
The recent upturn comes against weak year-earlier data – when sales fell in the immediate aftermath of the military coup in September 2006. Nevertheless, sentiment is improving ahead of next month’s elections and strong promotional activity is also helping the market to recover.
Toyota Motor Thailand expects a strong final quarter, with the end of year motor show, new model activity and the improving political outlook helping the market.
The country’s economic growth has lagged behind the rest of the region this year, with GDP growth forecast at 4.3% for 2007. High oil prices will remain a drag on growth, as will the anticipated slowdown in export demand. The government nevertheless expects these factors to be offset by rising consumer spending at home and a rise in inward and domestic investments. It expects GDP growth to rise to 4.6% in 2008.
Tony Pugliese
