Japanese automakers are sticking to their targets in Indonesia in defiance of the longest sales decline in six years, resorting
\nto steep discounts to entice tight-spending consumers into showrooms that remain stubbornly empty.<\/p>\n
Honda Motor Co Ltd, Nissan Motor Co Ltd and Mazda Motor Corp aim to sell more cars this year than last, though overall sales to
\ndistributors have fallen each month since September and are down 17% in 2015.<\/p>\n
\u201cThe decline is pretty drastic,\u201d said dealership salesman Jonatan, whose monthly average sales of Toyota Motor Corp cars was
\nfour versus eight last year. \u201cWe certainly have to work extra hard to sell cars these days.\u201d<\/p>\n
Auto sales are a key indicator of consumption in Indonesia, where the economy is growing at its slowest since 2009, and where 7%
\ninflation is eroding purchasing power.<\/p>\n
Consumers are consequently reserving more money for primary needs, the central bank said last month.<\/p>\n
In response, automotive industry association Gaikindo in June lowered its sales forecast for this year to a range of one million
\nto 1.1 million vehicles from 1.2 million.<\/p>\n
\u201cWe are struggling with the market slowdown,\u201d said PT Honda Prospect Motor director Jonfis Fandy.<\/p>\n
The firm has been trying to boost sales since early in the year via promotions usually reserved for Indonesia\u2019s annual
\nautomotive exhibition in August, to meet Honda\u2019s target sales increase of 10%.<\/p>\n
Promotions include discounts on down payments, low-interest loans, and extending instalment periods to seven years from around
\nfour. Honda has sold 1.4% more cars as of end-May.<\/p>\n
At Mazda, which aims to sell 9% more cars, one customer said he was offered 11% off a 450 million rupiah (RM128,450) sports
\nutility vehicle.<\/p>\n
But the mid-30s communication manager still delayed purchase for six months as economic conditions made him worry about finances.<\/p>\n
Astrid Ariani Wijaya, senior marketing manager at PT Mazda Motor Indonesia \u2013 for whom year-to-date sales figures are unavailable
\n\u2013 said the slowdown is affecting all industries, not just auto.<\/p>\n
\u201cWhat we are doing is maintaining advertising consistency in mass media,\u201d she said. \u201cDiscounts would depend on the model, and
\neach dealer has different stocks.\u201d<\/p>\n
Inflation and a weak rupiah are keeping the benchmark interest rate high at 7.5%, so the central bank is trying to boost demand
\nby easing the passenger car down payment requirement to 25% from 30%.<\/p>\n
\u201cWillingness to spend money on big purchases is not there,\u201d said BNI Securities analyst Thendra Crisnanda. \u201cSo I doubt the down
\npayment easing will be a significant help.\u201d<\/p>\n
Auto demand usually peaks before Indonesia\u2019s Lebaran holiday in mid-July as consumers buy cars to visit home towns, but this
\nyear it is far less than expected, Crisnanda said.<\/p>\n
At Toyota, one dealership salesman said supplies had fallen for its most popular multi-purpose vehicle, the Avanza.<\/p>\n
Rahmat Samulo, a director at PT Toyota Astra Motor, said the company is making supply-demand adjustments and that, \u201cif the stock
\nis enough, we are not going to add excessively.\u201d<\/p>\n
Toyota has sold 25% fewer cars as of end-May. It declined to disclose its 2015 target, but said it aims to maintain its market
\nshare of around 33%.<\/p>\n
Japan\u2019s top automaker opened its second local plant in 2013, will open an engine factory next year, and plans to invest further
\nin the country.<\/p>\n
Despite the slowdown, investment plans are \u201cstill on track\u201d, an official at PT Toyota Motor Manufacturing Indonesia told Reuters.<\/p>\n
At Nissan, where sales are down 22%, its two local factories are running at 40% capacity, and have inventory turnover of about
\ntwo months versus less than one month \u201cduring good days\u201d, Trimegah Securities said in a June report.<\/p>\n
PT Nissan Motor Indonesia president director Steve Ardianto did not comment on production. But he said the firm is offering
\nvariants of current models, adding dealerships and improving service to lift its 2015 share to 6% from 4.7%.<\/p>",
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