New vehicle sales in Indonesia plunged 24% to 74,724 units in March 2024 from 101,048 units a year earlier, according to member wholesale data compiled by local automotive industry association Gaikindo.
This was the market’s ninth consecutive month of decline following a strong two year rebound from the pandemic lows.
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The central bank’s interest rate hikes in the last 18 months, from 3.5% to 6%, have dampened consumer demand for large purchases. Economic growth in the country remained sluggish at around 5% in the fourth quarter of 2023, with slowing private consumption and investment offset by a pick up in exports and government spending compared with the previous quarter.
First quarter sales also dropped 24% to 215,069 units from 282,125 year on year with sales of passenger vehicles falling 19% to 170,403 units while commercial vehicle volume plunged 37% to 44,666 units.
Toyota sales fell by 23% to 65,655 units year to date (YTD) while Daihatsu deliveries were down 15% at 46,003 units; Honda 28,066 units (-40%); Mitsubishi 19,109 (-13%); and Suzuki 17,801 units (-21%).
Vehicle production fell 25% to 294,821 units YTD while exports of assembled vehicles dropped 19% to 108,251 units.
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By GlobalDataSales of battery electric vehicles (BEVs) amounted to just 5,920 units YTD with Chinese brands increasingly dominating this segment with low cost models.
The best selling model was the 38kWh Wuling Binguo small car (which is priced from IDR317m /US$19,950) with 3,121 deliveries or more than half the industry total. Other key players include Chery with the Omoda E5, Hyundai with the Ioniq 5 and SAIC Motor with the MG ZS EV.
China’s BYD and Vietnam’s VinFast have also launched local sales operations and have pledged to invest in local production . Hyundai also said it would produce a smaller BEV later this year powered by batteries produced at its local joint venture plant with LG Energy Solution.
At the beginning of the year, the Indonesian government extended the sales tax discount (from 11% to 1%) on BEVs with a minimum 40% local content until the end of 2024 to help drive up domestic demand and help attract inward investment.
It also decided to suspend import duties on BEVs until the end of 2025 for companies investing in local production.
