Auto association sees improved car sales

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)