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Car sales in the first six months of this year plunged by 49
percent compared with the same period last year as 2005's fuel price
hikes and high interest rates cause potential buyers to forego new car
purchases.
Figures released Thursday by the Indonesian Automotive Industries
Association (Gaikindo) showed that the number of cars sold declined to
149,634 in the first half of this year from 295,779 in the same period
last year.
Monthly car sales in the first semester ranged between 22,000 and
26,000, roughly half last year's range of between 49,000 and 52,000,
Gaikindo said.
The report says that automaker PT Astra International, which assembles
Daihatsu, Isuzu, Nissan diesel, Toyota and Peugeot cars, continues to
hold the biggest share of the market on 58 percent.
In second place is Mitsubishi, which sold 4,662 cars up to June,
followed by Suzuki on 3,818 and Honda on 2,400. A further 1,982 cars
from other makers were also sold.
Many analysts say the significant drop in car sales is due to the
dramatic October 2005 fuel price hikes.
Another factor weighing on the market is continuing high interest
rates. Some 80 percent of the cars purchased in Indonesia are done so
on credit.
Some banks and leasing companies, however, have recently started to
lower their lending rates, with a number of them even pushing their
rates below 10 percent.
"For the consumer, the decline in credit interest rates opens up more
opportunities for them to buy. But I don't think this will be enough to
jump-start car sales this year. That is not going to happen," said PT
Indomobil Sukses president director Makmur Gunadi Sinduwinata, as
quoted by Detik.com on Thursday.
He also said that interest rates of less than 10 percent were
unreasonable given that the central bank's key rate still stood at
12.25 percent.
Gunadi said that the competition to offer the lowest interest rate
could have an adverse effect on the automotive business as a whole.
He predicted that those cars priced in a range of between Rp 150
million and Rp 200 million, such as multipurpose vehicle models, would
be the only ones that might possibly show an increase in sales this
year.
He argued that those who had the wherewithal to buy luxury models would
rather invest their money in the banks to benefit from high interest
rates.
Meanwhile, PT Toyota Astra Motor said it expected to sell 5,000 of the
newly revamped Avanza minivan per month, 25 percent more than the older
model. The company will to market the revamped Avanza, which will have
a more fuel-efficient engine, in August, said Jodjana Jody, head of
sales at Toyota Astra, in a phone interview with Bloomberg ahead of the
ceremony introducing the new model. Toyota-Astra sells an average of
4,000 of the older Avanzas each month, Jody said.
New and redesigned models "can dramatically boost sales, regardless of
purchasing power," Jodjana said. "That is the character of the
Indonesian car market," he said, declining to disclose the price of the
redesigned Avanza.
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