New vehicle sales in Indonesia plunged by 23% to 57,760 units in June 2025 from 74,615 in the same month last year, according to wholesale data compiled by the local automotive industry association Gaikindo.

Last month the market continued to decline from weak year-earlier volumes, when sales dropped by 13% from post-pandemic peak levels in the previous year. Market sentiment has weakened significantly in the last year, with fewer consumers committing to large purchases, while companies also face growing uncertainty regarding international trade due to possible import tariff hikes in the US.

The latest government data showed that GDP growth slowed slightly to 4.9% year-on-year in the first quarter of 2025, compared with 5.0% growth in the previous quarter, with domestic consumption and exports both slightly weaker. Bank Indonesia last cut its benchmark interest rate to 5.5% in May - the third 25-basis-point cut from last year’s peak of 6.25%.

Gaikindo’s deputy chairman, Jongkie Sugiarto, last month told local reporters: “Weaker purchasing power for new cars has become the main cause of the ongoing decline in auto sales.”

In the first six months of 2025, the vehicle market shrank by almost 9% year-on-year to 374,740 units after declining by 19% to 410,020 units in the same period last year, with sales of light passenger vehicles falling by over 8% to 292,682 units while commercial vehicle sales fell by over 9% to 82,058 units.

Toyota’s first-half sales declined by 4.5% to 123,846 units, with volumes supported by popular models such as the recently-launched Hilux Rangga and the Innova MPV; followed by Daihatsu which saw its sales plunge by 25% to 64,405 units; Honda 32,681 units (-31%); Mitsubishi 31,081 units (-15%); and Suzuki 27,180 units (-18%). Japanese automakers are coming under increased pressure in this market from the growing presence of Chinese brands, which are driving up sales for battery electric vehicles (BEVs) in the country.

BEV sales surged almost threefold to 34,890 units in the first six months of the year, with BYD and its Denza brand combined accounting for 19,825 units, followed by SAIC-GM-Wuling with 5,170 units and Chery/Omoda with 4,737 units.

Overall vehicle production in the country fell by almost 2% to 552,509 units year-to-date, while exports of fully-assembled vehicles increased by over 7% to 233,648 units.