Firmer rupiah no effect on automobile prices: Analyst<\/p>\n
JAKARTA (JP): Although the recent strengthening of the rupiah
\nwill not bring skyrocketing automobiles prices down, it revives
\nhope in the industry, automotive analyst Suhari Sargo said on
\nThursday.<\/p>\n
Automotive industry insiders remained unsure whether the
\nrupiah's revival would continue, he added, and thus automotive
\nfirms would not respond by cutting their sales prices.<\/p>\n
The industry is still burdened by extremely high bank interest
\nrates which most automotive firms could not afford, he said.<\/p>\n
\"The strengthening of the rupiah gives only a little hope. The
\noverall situation remains dull as interest rates remain so high.\"<\/p>\n
Most local automobile firms have raised sales prices by at
\nleast 100 percent following the drastic fall of the rupiah
\nagainst the U.S. dollar.<\/p>\n
But the rupiah has appreciated to 7,600 from 12,000 in early
\nSeptember, still a 67 percent drop from the 2,450 level in July
\n1997.<\/p>\n
Bank Indonesia, the central bank, has cut benchmark interest
\nrates of its one-month promissory notes to 56 percent now from 70
\npercent in early September.<\/p>\n
Suhari argued that most companies could not operate normally
\nwith interest rates above 50 percent.<\/p>\n
\"As the monetary situation remains relatively tight, the
\nstrengthening of the rupiah does not give much benefit to the
\nreal sector, including the automotive industry.\"<\/p>\n
Indonesia's automotive sector would not rebound in the next
\ntwo years, he said.<\/p>\n
Suhari said the automotive sector was battered and would
\nremain in a bad condition until the economy started to grow.<\/p>\n
Even then, auto sales would not automatically pick up as it
\nwould need much more time for people to regain the level of early
\n1997.<\/p>\n
After experiencing a drastic plunge this year, automobile
\nsales are expected to grow by about 10 percent next year, \"but a
\n10 percent increase from a small number\".<\/p>\n
According to data from Association of Indonesian Automotive
\nIndustry, sales of automobiles in the domestic market slumped
\n83.2 percent to 54,289 units during the first nine months of this
\nyear, from 323,276 units recorded in the same period of last
\nyear.<\/p>\n
Total production fell 87.4 percent to 40,284 units from
\n319,191 units.<\/p>\n
Meanwhile, exports of automobiles decreased 13.4 percent to
\n3,827 units from 4,421 units.<\/p>\n
The worst monthly automobile sales were recorded in May and
\nJuly during a momentous change in leadership following massive
\nrioting in Jakarta and other cities.<\/p>\n
Automobile sales in May and June were only 2,220 vehicles and
\n2,251 vehicles respectively. Sales improved in June to 5,113
\nunits, and increased again to 6,115 units in August before
\ndecreasing to 5,966 units in September.<\/p>\n
The highest monthly sales were recorded in January when 14,400
\nvehicles were sold.<\/p>\n
Automobile sales in 1997 averaged 32,000 vehicles per month.
\n(29)<\/p>",
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