Auto association sees improved car sales
JAKARTA (JP): The Association of Indonesian Automotive Industries (Gaikindo) expects domestic car sales will reach 60,000 units this year, up from the initial forecast of 50,000 units.
Gaikindo's chairman Bambang Trisulo said on Wednesday improved car sales would be possible due to the quicker than expected turnaround in the country's economy.
"The country's economic recovery and political stability after the elections are the main contributors to the improvement in automotive vehicle sales this year," he told The Jakarta Post.
Domestic sales in June were recorded at over 4,800 units, a 20 percent jump from 4,021 units in May.
Bambang said domestic car sales might exceed 100,000 units next year if the country's economy and political condition continued to stabilize.
"With the strengthening of the rupiah and people's purchasing power starting to improve, I think car sales may exceed 100,000 units next year.
"The expected increased stable political conditions under the new government is also expected to push up domestic car sales next year."
Domestic car sales dropped to 58,000 units in 1998 as the economic crisis, which began in the middle of 1997, became more severe and the country's political situation became tenuous following the downfall of former president Soeharto.
Bambang said that prior to the crisis the country's automotive market had shown impressive growth, with annual sales of 400,000 vehicles of various makes.
Annual car sales reached a peak of 403,000 in 1996 before mid- 1997.
President of the ASEAN Automotive Federation (AAF) Herman Z. Latif provided a brighter outlook to domestic automotive sales this year, saying he believed they might reach over 80,000 units this year.
"Car sales usually increase toward the end of the year. If sales continue to increase, I think they may reach 80,000 units this year," he said.
According to Gaikindo data, domestic car sales reached over 28,000 units during the first half of this year.
The association earlier predicted that automotive sales would decline to between 40,000 cars and 50,000 cars this year, from 58,000 cars last year, because demand remained low.
Bambang said the new automotive policy, in which the government lifted its incentives for vehicles with high local content, had had little effect on domestic sales.
"But in the future, it will encourage domestic sales, as the policy will create fairer prices."
APEC dialog
Herman said AAF would hold the first Asia-Pacific Economic Cooperation (APEC) Automotive Dialogue in Bali from July 26 to July 27.
The dialog, to be attended by 168 participants from the automotive industry, as well as senior government executives from APEC member countries, would focus on efforts to rescue the dying automotive industry in ASEAN countries, he said.
"AAF will organize this dialogue in cooperation with the Indonesian Automotive Federation, which is the parent organization of all automotive-related associations in Indonesia."
Herman said Minister of Trade and Industry Rahardi Ramelan was scheduled to open the dialog, while Director General of Basic Metal and Machinery Industries and Electronics Agus Tjahajana would head the Indonesian delegation.
"We believe the automotive industry should be rescued first before we prepare it to face liberalization issues," he said.
Herman said that after the conference industry sources from APEC member countries would visit Jakarta to meet the Minister of Industry and Trade, the State Minister of Investment and the Minister of Communications to discuss prospects for the Indonesian automotive industry. (gis)