Indonesia's new vehicle market continued to plunge in February 2021, by 38% to 49,202 units from 79,573 units a year earlier, according to member wholesale data compiled by industry association Gaikindo.
The vehicle market remained extremely depressed after GDP shrank by 2.1% last year on weaker domestic consumption, investment and exports. Prolonged restrictions on consumer and business activity have had a devastating effect on the small and medium business sectors with unemployment levels also soaring over the last year.
In February the government announced a temporary suspension of the luxury tax on local passenger vehicles with engines smaller than 1500cc for three months starting in March to help support the local industry. The central bank also cut its benchmark interest rate further in February to a historic low of 3.5% to help stimulate domestic consumption.
In the first two months of the year, vehicle deliveries to dealers fell by over 38% to 102,111 units from 159,997 units in the same period of last year, with passenger vehicle sales dropping by almost 42% to 71,149 units while sales of trucks and buses were down by just over 19% at 30,962 units.
Toyota reported a sales decline of close to 37% to 31,177 units year-to-date, followed by Daihatsu with an almost 39% fall to 18,405 units, Honda 14,043 units (-42%), Mitsubishi Motors 11,652 (-31%) and Suzuki 11,000 units (-42%).
The next monthly result will benefit from more favourable year-earlier comparisons, as well as by the suspension of the luxury tax on small cars in the next three months starting from the beginning of March. In the following three months, inclusive of June and August, the government will offer a luxury tax discount of just 50% which will be halved again in the subsequent three months.