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 --------------------------------------------------- 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)