Automaker body lowers sales projection

JAKARTA (JP): The Association of Indonesian Automotive Industries (Gaikindo) has lowered its projection on vehicle sales this year to 60,000 from 100,000.

Association chairman Herman Z. Latief said yesterday that auto sales would not likely exceed 60,000 this year, a mere 15 percent of the 395,000 vehicles sold last year.

"Between January and May this year, only 33,000 vehicles were sold," Herman told reporters at an informal lunch meeting.

"Assuming that at least 3,000 vehicles would be sold each month until December, fewer than 60,000 vehicles would be sold this year."

A continuing drop in car sales would hurt not only auto assemblers but also supporting industries like spare part suppliers, he said.

Even if the country's economy begins a recovery next year, the auto industry may not be in better shape for four or five years, he said.

"Next year, car sales will likely remain below 100,000."

Production would only return to precrisis levels after the industry fully recovered, he said.

Most auto firms have virtually stopped production due to sharply declining sales and soaring costs of imported components.

Herman said the country's auto industry normally produced 40,000 cars a month.

He said automotive supporting industries would face even worse hardships.

"Second and third line suppliers of spare parts would sooner or later go bankrupt," he said, because they would no longer be able to produce.

"If by the middle of next year we begin production again, supplies of spare parts would have already run out here, so that car producers would have no choice but to import most of the spare parts again."

On a more positive note, Herman said demand continued for automobiles, especially commercial vehicles.

According to data from dealerships, retail car sales were currently two to three times higher than Gaikindo's number, he said.

Gaikindo's data is based on wholesale delivery of vehicles from manufacturers or assemblers to their dealership.

The retail sales data was obtained through calculation of dealers' registration invoices sent to manufacturers for each vehicle sale.

"This shows that there are still real demands for automobiles out there."

Most of the vehicles were commercial cars, he said, adding that their purchasers might have be those interested in investing in agribusiness. (das)