New vehicle sales in Indonesia rose 44.9% year on year to a monthly high of 101,639 units in June, according to wholesale data released by the Indonesian automotive association (Gaikindo).
The market continues to be driven higher by a booming domestic economy, lifted by historically low interest rates. In the last two months, buyers also have rushed into the market in anticipation of tighter lending regulations introduced by Bank Indonesia on 15 June.
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The new rules direct retail banks to require a 30% down payment on passenger vehicle loans and 25% by finance institutions. This will affect mostly first time car buyers and low income earners. Close to 70% of all vehicle sales in Indonesia are financed by credit.
First half sales increased by 28% to 534,876 units, from 417,672 a year earlier, but the industry expects a much tougher second half as the effects of tighter lending take effect.
