New vehicle sales in Indonesia declined by over 11% to 61,843 units in January 2025 from 69,619 units in the same month of last year, according to wholesale data compiled by local automotive industry association Gaikindo.

The market last month came up against already weak year-earlier volumes, when sales dropped by 29% year-on-year, after the strong rebound from the pandemic lows fizzled out in 2023. Market sentiment has weakened significantly over the last year, with fewer consumers committing to large purchases, resulting in an overall 14% decline in total vehicle sales to 865,723 units in 2024.

The country’s economy expanded by just over 5.0% year-on-year in the fourth quarter of 2024, marginally better than in the previous quarter, supported by a slight improvement in private consumption while government spending and fixed investment growth slowed. Bank Indonesia cut its benchmark interest rate by a further 25 basis points to 5.75% in January to help support domestic consumption, following a hike in the VAT rate from 11% to 12% at the beginning of the year.

Sales of passenger vehicles declined by 14% to 48,157 units in January, with volumes also affected by more public holidays last month compared with last year, while commercial vehicle sales were unchanged at 13,686 units. Battery electric vehicle sales amounted to 2,429 units.

Toyota’s sales increased by 5% to 22,082 units last month, followed by Daihatsu with a 30% drop to 9,983 units; Honda with 7,276 units (-14%); Mitsubishi 5,028 units (-28); and Suzuki 4,982 units (-19%). Overall vehicle production in the country fell by 8% to 92,792 units in January, while exports of fully-assembled vehicles increased by 15% to 33,891 units.