New vehicle sales in Indonesia declined by 4% to 77,191 units in October 2024 from 80,270 units a year earlier, according to wholesale data compiled by the local automotive industry association Gaikindo. Last month’s sales came up against already weak year-earlier volumes, following a strong rebound in the previous two years from the pandemic lows.
Market sentiment has weakened significantly this year, with fewer consumers making large purchases. Economic growth slowed slightly to 4.95% year-on-year in the third quarter, compared with the previous quarter, underpinned by higher government spending and fixed investment while private consumption was unchanged. Bank Indonesia cut its benchmark interest rate by 25 basis points to 6.0% in October, the first cut since 2021, to help support domestic consumption.
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The Indonesian vehicle market declined by 15% to 710,406 units in the first ten months of 2024 from 836,048 in the same period of last year, with sales of passenger vehicles falling by 14% to 552,692 units while commercial vehicle sales dropped by 19% to 157,714 units.
Toyota’s sales declined by 14% to 235,331 units year-to-date (YTD), while its Daihatsu subsidiary reported a 13% drop to 139,945 units; Honda 77,953 units (-35%); Mitsubishi 59,693 (-7%); and Suzuki 54,482 units (-18%).
Overall vehicle production in the country fell by 18% to 996,462 units in this period while exports of assembled vehicles dropped by 8% to 391,483 units. The association last month reduced its 2024 full-year sales projection to 850,000 units in light of the recent market weakness, from it earlier forecast of 1.1 million units.
Sales of battery electric vehicles (BEVs) surged almost threefold to 30,740 units YTD, most of which were Chinese models. The best-seller was the Wuling Binguo small car priced from IDR317m (US$20,550) with 4,236 deliveries, with the company also selling 3,009 Cloud models and 2,980 Air micro-cars. BYD, which launched sales operations in June, delivered 6,960 BEVs YTD, while Chery sold 3,926 Omoda E5s, followed by SAIC Motor and Hyundai.
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By GlobalDataHyundai began selling of the locally-produced Kona Electric small SUV in July, powered by batteries produced at its local joint venture plant with LG Energy Solution, with 785 units sold so far. GAC Aion’s local distributor Indomobil launched sales of the Y Plus BEV in August.
China’s Hozon Auto began local assembly of its Neta V-II BEV in August, with the aim of achieving 60% local content, and plans to export the model to other right-hand drive markets in the region. BYD and Vietnam’s VinFast also plan to build BEV assembly plants in the country.
Earlier this year the government set a target of 50,000 BEV sales in 2024, after it extended the sales tax discount (from 11% to 1%) until the end of the year to help drive up demand and attract inward investment. It has also suspended the import duty on BEVs until the end of 2025 for companies investing in local production.
