New vehicle sales in Indonesia increased by 7.1% to 100,498 units in May from 93,769 units in the same month of last year, according to data compiled by industry association Gaikindo.
Last month's increase followed an even sharper rise in April as automakers stepped up deliveries to meet demand ahead of the Idul Fitri annual holidays in June.
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The economy overall has grown only moderately this year with first quarter GDP growth at just over 5%, reflecting slower growth in government spending and exports, while private consumption was unchanged.
The Bank of Indonesia hiked its benchmark interest rate twice last month, by a combined 50 basis points, to help support the weakening rupiah. With further increases likely this year, pressure on private consumption will increase.
Total vehicle sales in the first five months of 2018 increased 6% to 494,920 units from 467,117 units in the same period of last year.
Toyota reported a 17.5% drop in year-to-date sales to 143,440 units as its key Avanza compact MPV model came under further pressure from the highly successful Xpander which helped Mitsubishi more than double its sales to 90,416 units in this period.
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By GlobalDataHonda has been hit hardest by rising competition from Mitsubishi, with sales falling by almost 20% to 67,598 units so far this year, while Daihatsu's sales rose by 9.1% to 88,209 units and Suzuki's sales were up by just over 22% to 53,415 units.
