Automaker body lowers sales projection

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)