New vehicle sales in Indonesia declined 7% to 84,390 units in November 2023 from 91,086 units a year earlier, according to member wholesale data from automotive industry association Gaikindo.
This was the fifth consecutive month of decline for the market after a strong two year rebound from the pandemic lows. Sharp interest rate hikes by the central bank over the last year, from 3.5% to 6%, have begun to dampen consumer demand particularly for large purchases. Economic growth in the country moderated in the third quarter, to 4.9% year on year from 5.2% in the second quarter, reflecting mainly a sharp decline in government spending and weaker exports.
Vehicle sales in the first 11 months of the year were 2% lower at 920,518 units after growing by 19% to 942,499 in the same period of last year with sales of passenger vehicles slightly lower at 710,336 units while commercial vehicle sales declined 9% to 210,182 units.
The Indonesian government cut sales tax on battery electric vehicles (BEVs) to zero in May to help drive up demand and is now actively encouraging purchases by government departments. It is also pushing for the development of the country’s charging network as it targets 2m BEVs in circulation by 2030.
13,900 BEVs were sold in Indonesia year to date with Hyundai accounting for more than half of the total. Its locally assembled Ioniq 5 is by far the country’s best selling BEV, joined by the Ioniq 6 in August. SAIC-GM-Wuling is the second best selling BEV brand with BMW-Mini and Mercedes having also stepped up this year. Chinese EV startup Hozon delivered a first batch of 100 Neta V BEV SUVs to dealers in November.
Toyota sales were slightly higher at 304,736 units YTD followed by Daihatsu with a 2% decline to 175,195 units, Honda 130,544 units (+10%), Suzuki 73,655 units (8%) and Mitsubishi 71,086 units (-19%).
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Mitsubishi is increasing its production capacity in the country to 250,000 units per year with plans to expand its model range to include its Minicab MiEV and the new XForce compact SUV which was unveiled last August.
Overall vehicle production was down 3% to 1,295,372 units YTD while exports of assembled vehicles increased 11% to 468,595 units.