INDONESIA: Car sales will drop 15% industry association says

By just-auto.com editorial team | 18 April 2001

Indonesian car sales are likely to drop by about 15 percent this year to 250,000 units, from more than 300,000 last year, Association of Indonesian Automotive Industries (Gaikindo) chairman Bambang Trisulo told the Jakarta Post on Tuesday.

He blamed the estimated drop on uncertainty caused by the social-political condition in the country and lower than expected economic growth.

"We had expected sales this year to match last year's figure, but (with the rupiah) above 10,000 (per U.S. dollar) we now predict only 250,000 units," Bambang told the newspaper.

He said that if the rupiah continued to weaken in the next six months prices would likely increase, dampening demand for cars.

About 68,000 cars were sold during the first three months of the year, Bambang said.

He added that, while the average of 23,000 cars a month was higher than between January and March last year, it was a drop from the monthly average sales of about 30,000 recorded in the fourth quarter of 2000.

"If everything was favourable, the monthly sales average for the first three months of this year would have reached between 27,000 and 28,000 units," he added.

Bambang said that the tight market had forced distributors to employ various marketing strategies to maintain their sales.

Contrary to the bleak picture painted by Bambang, PT BMW Indonesia marketing and sales director Bintoro Tjitrowirjo told the Jakarta Post that he expected sales to increase by 37 percent to about 3,300 units this year.

He said that though the weakening rupiah was bound to have an effect on BMW sales, it would not be as damaging as the effect it would have on popular van models.

"Our market, the luxury car market, is small, unlike vehicles which are produced in high numbers each month," Bintoro said, adding that between January and March the company had sold approximately 800 cars.

Bambang told the newspaper that this year's 11th automobile exhibition from July 21 to July 29 at the Jakarta Convention Centre would be the starting point for an international exhibition planned for 2002.

"We have to start exhibiting at an international level next year because by then our market will not only be Indonesia," he said, referring to the implementation of the ASEAN Free Trade Area (AFTA) in 2002.

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