Car sales on local market level off in August

JAKARTA (JP): After an impressive 82.5 percent growth in July, the rebound in the domestic car market leveled off in August with sales increasing by a paltry 1.2 percent to reach 8,736.

Commenting on the latest figure from the Indonesian Automotive Association (Gaikindo), automotive analyst Suhari Sargo said the market had not picked up completely because it had a low absorption rate.

Low interest rates offered by multifinance companies could not generate more sales, he said, noting that few companies were willing to offer car loans due to the current political condition.

The sharp fluctuations in the rupiah's exchange rate during the month also forced some manufacturers to cancel plans to cut prices.

The rupiah, which was at one time below Rp 7,000 to the dollar, has now fallen, hovering above the Rp 8,000 level.

Commercial cars, including family vans, dominated the buying trend and accounted for sales of 7,947 in August, compared to 7,823 in July.

Sales of passenger cars fell to 789 from 810.

Exports of commercial cars also rose to 2,737 from 1,958.

Total domestic sales between January to August amounted to 40,248, comprising 34,898 commercial cars and 5,350 passenger cars.

Suhari remained optimistic that domestic car sales would reach 70,000 this year, up from 58,000 in 1998, provided the stable political situation prevailed.

He recalled that at the start of the year, the automotive association predicted sales would slump even further to 50,000.

Suhari said car sales would increase to about 9,000 in September because of the continuing effects of economic recovery and a stronger rupiah exchange rate.

Gaikindo also reported that domestic motorcycle sales jumped 26 percent to 45,299 in August, bringing the total from January to 259,054. (02)