New vehicle sales in Indonesia declined 14% to 80,270 units in October 2023 from 93,197 units a year earlier, according to member wholesale data compiled by local automotive industry association Gaikindo.
This was the fourth consecutive month of decline after a strong two year rebound from 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 for large purchases.
The country’s economy expanded 5.2% year on year in the second quarter after an upwardly revised 5% growth in the first quarter, reflecting mainly stronger domestic consumption which was supported by a rebound in domestic and international tourism.
Vehicle sales in the first 10 months of the year were almost 2% lower at 836,048 units, after growing 21% to 851,413 in the same period of last year, with sales of passenger vehicles just slightly lower at 642,204 units while commercial vehicle sales declined 7% to 193,844 units.
The 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.
Around 11,900 BEVs were sold in Indonesia YTD 2023 with Hyundai accounting for half. Its locally assembled Ioniq 5 is by far the country’s best selling BEV, joined by the 6 in August. SAIC-GM-Wuling is the second best selling BEV brand with BMW-Mini and Mercedes having also stepped up this year.
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Toyota sales fell 1% to 273,820 units YTD while Daihatsu sales were up 2% at 161,650 units helped by the recent launch of the updated Ayla small car and Terios small SUV.
Honda sales continued to rebound, by 12% to 119,945 units, helped by new models including the recent arrival of the WR-V, while Suzuki sales declined 8% to 66,530 units despite the recent launch of the XL Hybrid.
Mitsubishi sales plunged 21% to 64,076 units following strong growth in previous years. The company is currently increasing local capacity to 250,000 units per year with plans to expand its model range to include its Minicab MiEV and the new XForce compact SUV unveiled in August.
Overall Indonesian vehicle production was just slightly lower at 1,181,514 units YTD while exports of complete vehicles increased 11% to 426,381 units.