Dian Kuswandini, The Jakarta Post, Jakarta | Wed, 06/18/2008 10:45 AM | Business
Car purchases slightly decreased in May due to fuel price concerns, but industry players say sales were higher than expected.
According to a report by the Indonesian Automotive Industry Association (Gaikindo), car sales in May dropped 1.8 percent to 50,699 units from 51,639 units the previous month.
"The 1.8 percent decrease is actually a relief for the car industry, considering the recent fuel price hike and the January increase in car prices," Gaikindo vice chairman Johnny Darmawan told The Jakarta Post on Tuesday.
The government raised fuel prices by an average 28.7 percent on May 24, bringing the price of Premium gasoline to Rp 6,000 (65 US cents) per liter from Rp 4,500, diesel to Rp 5,000 from Rp 4,500 per liter and kerosene from Rp 2,000 to Rp 2,500 per liter.
Johnny said the association had expected the repercussions of the hikes to be worse as people's purchasing had been significantly reduced.
Gaikindo is currently considering a reduction in its sales target for this year by 7 percent from 500,000 units estimated at the end of last year, Johnny said.
Last year the country saw a total 434,000 cars sold.
The May report shows car brands Toyota, Isuzu, Daihatsu and Mitsubishi recorded drops in sales, while Suzuki and Honda posted increases.
The country's largest industry player, Astra Group, which is licensed to manufacture and distribute brands including Toyota, Daihatsu, Isuzu, Nissan Diesel and Peugeot, suffered a 6.21 percent sales drop to 25,555 units in May from 27,221 the previous month.
Astra's biggest selling brand, Toyota, suffered a 2.32 percent decrease in sales to 17,497 units.
Toyota sales general manager Jodjana Jody said Gaikindo only recorded wholesale and not retail transactions, adding that Toyota had a sizable consumer waiting list.
"The fact is, demand for cars has so far been very strong, while supplies are weak," Jody told the Post.
For example, he said, "as many as 9,400 Avanza units were ordered in May, but only 6,240 have so far been received".
As of May, there were 21,000 orders for the multi-purpose vehicle (MPV) Avanza that had not been filled. In addition, Toyota saw supply of its second highest selling model -- the MPV Kijang Innova -- fall short of demand by 6,000 units.
"Therefore, production capacity is actually the real problem for Toyota, and that is what we are working on," Jody said.
He said while the fuel price increase had impacted purchasing power, the effect would be temporary.
"Maybe the impact will be felt in the third quarter, but as interest rates are expected to remain low, people will still want to buy cars."
He said sales would also benefit from next year's general election.
"This will affect the real sector, boost expenditures in the economy and lead to a better purchasing power," Jody said.
Toyota is optimistic it can maintain sales at around 150,000 units this year, equating to a 34 percent market share, he said.
According to Gaikindo, the first five months of 2008 saw car sales grow 33.64 percent to 237,941 units from 157,892 in the same period last year.
Car purchases slightly decreased in May due to fuel price concerns, but industry players say sales were higher than expected.
According to a report by the Indonesian Automotive Industry Association (Gaikindo), car sales in May dropped 1.8 percent to 50,699 units from 51,639 units the previous month.
"The 1.8 percent decrease is actually a relief for the car industry, considering the recent fuel price hike and the January increase in car prices," Gaikindo vice chairman Johnny Darmawan told The Jakarta Post on Tuesday.
The government raised fuel prices by an average 28.7 percent on May 24, bringing the price of Premium gasoline to Rp 6,000 (65 US cents) per liter from Rp 4,500, diesel to Rp 5,000 from Rp 4,500 per liter and kerosene from Rp 2,000 to Rp 2,500 per liter.
Johnny said the association had expected the repercussions of the hikes to be worse as people's purchasing had been significantly reduced.
Gaikindo is currently considering a reduction in its sales target for this year by 7 percent from 500,000 units estimated at the end of last year, Johnny said.
Last year the country saw a total 434,000 cars sold.
The May report shows car brands Toyota, Isuzu, Daihatsu and Mitsubishi recorded drops in sales, while Suzuki and Honda posted increases.
The country's largest industry player, Astra Group, which is licensed to manufacture and distribute brands including Toyota, Daihatsu, Isuzu, Nissan Diesel and Peugeot, suffered a 6.21 percent sales drop to 25,555 units in May from 27,221 the previous month.
Astra's biggest selling brand, Toyota, suffered a 2.32 percent decrease in sales to 17,497 units.
Toyota sales general manager Jodjana Jody said Gaikindo only recorded wholesale and not retail transactions, adding that Toyota had a sizable consumer waiting list.
"The fact is, demand for cars has so far been very strong, while supplies are weak," Jody told the Post.
For example, he said, "as many as 9,400 Avanza units were ordered in May, but only 6,240 have so far been received".
As of May, there were 21,000 orders for the multi-purpose vehicle (MPV) Avanza that had not been filled. In addition, Toyota saw supply of its second highest selling model -- the MPV Kijang Innova -- fall short of demand by 6,000 units.
"Therefore, production capacity is actually the real problem for Toyota, and that is what we are working on," Jody said.
He said while the fuel price increase had impacted purchasing power, the effect would be temporary.
"Maybe the impact will be felt in the third quarter, but as interest rates are expected to remain low, people will still want to buy cars."
He said sales would also benefit from next year's general election.
"This will affect the real sector, boost expenditures in the economy and lead to a better purchasing power," Jody said.
Toyota is optimistic it can maintain sales at around 150,000 units this year, equating to a 34 percent market share, he said.
According to Gaikindo, the first five months of 2008 saw car sales grow 33.64 percent to 237,941 units from 157,892 in the same period last year.
