Jakarta (ANTARA) - Economist Josua Pardede, an alumnus of the\nUniversity of Indonesia and the University of Amsterdam, believes the\nstrengthening of the rupiah exchange rate offers a measured sense of\noptimism for the national automotive industry, potentially helping to\nhold back price increases in the near term.<\/p>\n
\u201cThe strengthening rupiah gives room for optimism for the automotive\nindustry, but that optimism needs to be very measured and not\nimmediately translated as a strong recovery in demand,\u201d Josua said when\ncontacted in Jakarta on Wednesday.<\/p>\n
The deputy chairman of the Indonesian Chamber of Commerce and\nIndustry\u2019s (Kadin) Standing Committee II for Global Economic Strategic\nStudies said a stronger rupiah can help reduce import cost pressures for\nvarious automotive industry needs, ranging from components, completely\nbuilt-up vehicles, batteries, spare parts, metal raw materials, and\nvehicle electronics, to logistics costs which are largely linked to the\nUS dollar.<\/p>\n
He explained that for producers and brand-holding agents that still\nhave high import content, the rupiah\u2019s strengthening helps maintain\nbusiness margins while holding back increases in vehicle selling\nprices.<\/p>\n
Despite being a breath of fresh air, Josua assessed that the rupiah\u2019s\nappreciation will not automatically cause vehicle prices to fall or\nmarket demand to surge in the short term.<\/p>\n
The impact on production costs, he said, usually takes time because\nthe industry is still using old stock, previous purchase contracts,\nongoing logistics costs, and hedging strategies put in place before the\nrupiah strengthened.<\/p>\n
Moreover, vehicle prices are also influenced by various other factors\nsuch as financing costs, taxes, incentives, labour wages, raw materials,\npromotions, and the level of market competition.<\/p>\n
\u201cSo, a stronger rupiah is more realistically used to hold back price\nincreases, not to immediately lower prices drastically,\u201d explained the\nobserver who also serves as Chief Economist at PermataBank.<\/p>\n
From the consumer side, Josua assessed that the rupiah\u2019s\nstrengthening is a positive sentiment, but not yet strong enough to\nchange vehicle purchasing decisions.<\/p>\n
According to him, the decision to buy a car is more determined by the\nability to pay down payments and instalments, job security, fuel prices,\nand confidence in household economic conditions.<\/p>\n
Josua noted that sales data which increased year-on-year but declined\nmonth-on-month indicates the market is improving compared to last year,\nbut has not fully recovered.<\/p>\n
\u201cThis means the market still needs to be managed with careful\npricing, financing, and stock strategies,\u201d Josua said.<\/p>\n
It is known that the rupiah exchange rate on Monday (15\/6)\nstrengthened by 82 points, or 0.46 percent, to Rp17,778 per US dollar\ncompared to the previous close of Rp17,860 per US dollar. Previously,\nthe rupiah exchange rate had also weakened to around Rp18,000 per US\ndollar. As of Wednesday afternoon, the rupiah exchange rate reached\nRp17,758 per US dollar.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/stronger-rupiah-helps-curb-automotive-price-hikes-economist-says-1781697483", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }