New vehicle sales in Indonesia were forecast to fall by 40% to around 600,000 units in 2020, from just over 1m units in 2019, as the global COVID-19 pandemic continued to ravage the economy.
Indonesia entered its third month of lockdown this week after the government on 18 March required all non essential businesses to shut down unless they were able to implement work from home policies.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Only essential businesses such as food, healthcare, banking, utilities and transportation have been allowed to operate normally, albeit with additional safeguards in place.
Millions have already lost their jobs, leaving many households without significant income.
So far more than 18,000 COVID-19 coronavirus cases have been confirmed in the country, one of the highest totals in south east Asia, of which close to 12,500 remain active.
More than 4,300 confirmed patients have recovered while there have been almost 1,200 related deaths recorded.
But there was concern only a miniscule fraction of the population had been tested for the virus.
The Association of Indonesian Automotive Manufacturers (Gaikindo) cut its full year forecast this week as it became increasingly evident the global pandemic would have a significant impact on the economy.
GDP growth slowed to just under 3% year on year in the first quarter of 2020, from 5% in the fourth quarter of last year, but the full impact of the pandemic would not show through until the second quarter data is released.
Wholesale data released by the largest vehicle distributor, Astra International, showed total vehicle sales fell by over 90% year on year to 7,871 units in April with car dealerships across the country forced to close and local vehicle manufacturers announcing temporary shutdowns due to a lack of demand.
Gaikindo chairman Yohannes Nangoi told reporters “April’s wholesales number is the worst we’ve seen in decades.
“With the lockdown continuing across Indonesia, we assume that the situation will be worse in May.”
Yohannes added many vehicle manufacturers, despite operating on a single shift, had agreed not to lay off workers for the time being after the industry ministry asked Gaikindo to urge its members not to close factories permanently.
The association had asked the government for additional stimulus to help support the domestic vehicle market, including vehicle tax rate cuts of up to 50%, relax import and export permit requirements and provide other business tax concessions.
Gaikindo also cut its vehicle export forecast for this year to 175,000 units from a previous up to 400,000 units.
