Analysts less upbeat on 2001 car sales

JAKARTA (JP): Automotive market analysts are less than upbeat about 2001 domestic car sales, challenging the optimistic forecast by the Association of Indonesian Automotive Industries (Gaikindo).

Ferry Hartoyo of securities firm PT Vickers Ballas Tamara said on Friday this year's car sales would fall by about 15 percent to about 255,000 units from last year's 300,000 units.

"All macroeconomic indicators this year will tend to pressure car sales to a lower level than last year's," Ferry told The Jakarta Post.

He said the decline of the rupiah against the US dollar and domestic political uncertainty were among the negative factors affecting car sales this year.

Gaikindo revised upward on Thursday its 2001 sale forecast to 280,000 units, from the initial forecast of 250,000 units it made in January.

Association chairman Bambang Trisulo said the more optimistic forecast was based on better-than-expected sales in April and May.

But Ferry said the weaker rupiah had pushed automobile prices up, which would in turn cut demand. "The local currency has dropped by 11 percent to about Rp 11,300 per dollar from Rp 9,525 earlier this year," he said.

He added that the ongoing political uncertainty would discourage people from buying cars.

Another analyst at a foreign brokerage firm also expressed pessimism about domestic car sales this year, voicing similar arguments.

"There will be a slight technical rebound (in sales) after the MPR's special session. But it will only be temporary, as political uncertainty may still prevail," he said, referring to the People's Consultative Assembly, the country's highest legislative body, which will hold a special session on Aug. 1 that could lead to the removal of embattled President Abdurrahman Wahid.

Some fear that if the Assembly holds the special session, it will trigger wider conflicts between the President's supporters and opponents.

The analyst said car sales in the second half of the year would be below the first half figure of about 148,000 units.

Gaikindo said car sales in the first half of the year were better than expected because of stronger sales in April and May, at about 29,000 units per month compared to the initial forecast of 22,000 units.

Bambang said people rushed to buy cars during this two-month period in anticipation of coming higher prices, as the government earlier announced plans to introduce higher value added taxes (VAT), luxury taxes and import taxes. The government later dropped plans to increase the VAT.

Sales in April and May led some Gaikindo members to forecast 2001 car sales would equal last year's figure.

Automotive industry observer Soehari Sargo said the solid sales in April and May could not last because consumers' purchasing power had not yet recovered to precrisis levels.

"Sales will decline as soon as the market can no longer absorb the products," he said.(03)