Indonesian car sales are likely to drop by about 15 percent this year to 250,000
units, from more than 300,000 last year, Association of Indonesian Automotive
Industries (Gaikindo) chairman Bambang Trisulo told the Jakarta Post on Tuesday.

He blamed the estimated drop on uncertainty caused by the social-political
condition in the country and lower than expected economic growth.

"We had expected sales this year to match last year’s figure, but (with
the rupiah) above 10,000 (per U.S. dollar) we now predict only 250,000 units,"
Bambang told the newspaper.

He said that if the rupiah continued to weaken in the next six months prices
would likely increase, dampening demand for cars.

About 68,000 cars were sold during the first three months of the year, Bambang
said.

He added that, while the average of 23,000 cars a month was higher than between
January and March last year, it was a drop from the monthly average sales of
about 30,000 recorded in the fourth quarter of 2000.

"If everything was favourable, the monthly sales average for the first
three months of this year would have reached between 27,000 and 28,000 units,"
he added.

Bambang said that the tight market had forced distributors to employ various
marketing strategies to maintain their sales.

Contrary to the bleak picture painted by Bambang, PT BMW Indonesia marketing
and sales director Bintoro Tjitrowirjo told the Jakarta Post that he expected
sales to increase by 37 percent to about 3,300 units this year.

He said that though the weakening rupiah was bound to have an effect on BMW
sales, it would not be as damaging as the effect it would have on popular van
models.

"Our market, the luxury car market, is small, unlike vehicles which are
produced in high numbers each month," Bintoro said, adding that between
January and March the company had sold approximately 800 cars.

Bambang told the newspaper that this year’s 11th automobile exhibition from
July 21 to July 29 at the Jakarta Convention Centre would be the starting point
for an international exhibition planned for 2002.

"We have to start exhibiting at an international level next year because
by then our market will not only be Indonesia," he said, referring to the
implementation of the ASEAN Free Trade Area (AFTA) in 2002.


To view related research reports, please follow the
links below:-

Automotive
b2b – Strategic threats and opportunities in the automotive supply chain

General
Motors Strategic Review