Jakarta (ANTARA News) - Indonesian vehicle sales are expected to jump by a fifth this year to 520,000 units, powered by economic growth in rural areas and extra spending ahead of an election year, the head of an industry group said on Friday.
Bambang Trisulo, the chairman of Indonesia's automotive industry association (Gaikindo), said the oil price remained a key risk to the outlook for car sales in Southeast Asia's
"If the government is committed to its subsidy spending and does not raise subsidised fuel prices, we can grow.
Sales can reach 520,000 units in 2008 given economic development in regional areas is positive," Trisulo told Reuters in a telephone interview.
"But in 2009 things could be tougher, the oil price could remain the drag factor, but extra spending in front of the elections could provide a push for the industry. Overall I think sales can remain above 500,000 units that year," he added.
Indonesia's vehicle sales grew 36.2 percent last year to 434,449 units, recovering from a huge slump in 2006 after the government slashed spending on subsidies and lifted domestic fuel prices. (*)