Automotive market will cool as credit brake is applied
Automotive market will cool as credit brake is applied
By Mitchell Mackey
After a year of a strong 15 percent growth, the Indonesian
automotive market is set for a period of consolidation, according
to Herman Latif, chairman of the Association of Indonesian
Automotive Industries.
Herman said the government's tight monetary policy, which is
designed to slow the growth of consumer credit, would have an
impact on buyers confidence and apply a brake to the market.
The year 1995 was the fourth successive year in which the
automotive market recorded a big sales increase, with sales
jumping from 326,471 vehicles in 1994, to 384,449 in 1995.
However, the market could dip slightly in 1996.
"The market will be between 380,000 vehicles and 400,000
vehicles. To be more certain, I would like to wait until after
the first semester results," Herman said.
"This year's sales will be affected by the tight monetary
policy and the general election in 1997.
"Businesspeople will not be too aggressive.
"If we can sell the same amount of cars as last year it will
be good enough," Herman said.
Herman, who is also vice president of Krama Yudha Group, which
assembles and distributes Mitsubishi vehicles, said a major
concern was the market's passenger car sector.
Passenger car sales dropped in 1995; down 2,491 vehicles from
40,412 in 1994.
"Passenger car sales are a tightly contested sector with
numerous competitors fighting for a small segment," Herman said.
"It is not just a problem for the newcomers, such as Daewoo and
Hyundai."
Opel's director of sales and marketing, Terence Johnsson, said
it was difficult to predict the market's direction.
"Indonesia is the only market in the world dominated by
recreational vehicles with an emerging passenger car segment,"
Johnsson said. "Opel will maintain flexibility and short life
cycles for its vehicles to adapt to market changes," he said.
Opel had a stable 1995, with its passenger cars sales going
well.
Overall, the market produced more winners than losers.
Of the volume players, Mitsubishi, Toyota, Daihatsu, Suzuki
and Isuzu scored big gains, especially with their commercial
vehicles.
Nissan, Mercedes Benz and BMW also recorded good results, but
of much lower bases.
Hard hit by the strong Yen, Honda suffered a big slump, with
its sales falling from 8,346 vehicles in 1994, to 4,870 vehicles
in 1995. Mazda was also affected, with its numbers dropping from
4,305 vehicles to 3,026 vehicles.
Total motor vehicle sales:
1992 1993 1994 1995 1996
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171,899 214,298 326,471 384,449 400,000 (estimated)
Vehicle sales by brand
1994 1995
BMW 2,898 3,151
Daihatsu 60,856 63,243
Ford 3,197 2,880
Opel 1,322 1,228
Honda 8,346 4,870
Isuzu 32,111 42,966
Mazda 4,305 3,026
Mercedes Benz 4,864 7,575
Mitsubishi 59,336 73,709
Nissan 1,146 1,752
Suzuki 56,723 71,004
Toyota 80,608 97,912
Others 10,759 11,133
Source: Association of Indonesian Automotive Industries
(Gaikindo)