New vehicle sales in Indonesia dropped 20% to 79,883 units in September 2023 from 99,986 a year earlier, according to auto industry association Gaikindo.
This was the third 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 5.75%, have dampened consumer demand for large purchases.
The country’s economy expanded by 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 nine months of the year were slightly lower at 755,173 units after growing 19% to 758,216 in the same period of last year, with sales of passenger vehicles rising 1% to 578,438 units while commercial vehicle sales declined 5% to 176,735 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 development of the country’s charging network as it targets 2m BEVs in circulation by 2030.
Around 10,000 BEVs were sold in Indonesia in the first nine months of 2023 with Hyundai accounting for half 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.
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Toyota sales increased 1% to 246,382 units year to date (YTD) while Daihatsu sales were up 5% at 147,551 units helped by the recent launch of the updated Ayla small car. Honda sales continued to rebound, by 11% to 108,007 units, helped by new models including the recently launched WR-V, while Suzuki sales declined 6% to 60,540 units despite the recent launch of the XL-7 Hybrid.
Mitsubishi sales plunged 23% to 58,139 units following strong growth in previous years. The company is currently increasing its local production capacity to 250,000 units per year with plans to expand its model range to include the Minicab MiEV and the XForce compact SUV unveiled in August.
Overall vehicle production was just slightly higher at 1,060,823 units YTD while exports of assembled vehicles increased 13% to 379,498 units.