Car sales up 7.5% in first quarter

The Jakarta Post, Jakarta

A stronger rupiah and a better political outlook have pushed year-on-year car sales up by some 7.5 percent to 73,900 units during the first three months, according to estimates by the Association of Indonesian Automotive Industries (Gaikindo).

The association's chairman Bambang Trisulo said on Tuesday that if the favorable conditions continued, total sales might climb to 310,000 units compared to 300,000 a year earlier.

Gaikindo preliminary sales figures showed car sales in March rising 25 percent to around 28,500, up from 22,700 in February.

Explaining the sharp rise, Bambang said the March figures included delayed sales from the month before, when heavy floods in several cities disrupted deliveries. Sales in February were recorded flat at 22,700 units he said.

"Growth has been normal so far, but we have upgraded our projection to around 310,000 (cars) should the rupiah maintain its current strength and the political outlook remain good," he told The Jakarta Post.

Late last year Gaikindo projected 2002 car sales at 280,000 assuming the rupiah stayed at 10,000 to the U.S. dollar.

However, on Monday the rupiah rose to its highest level in eight months as it hit 9,415 to the dollar compared to 10,200 in January.

Bambang said the rupiah's bullish trend would improve car sales.

But he added that the stronger currency would be unlikely to push car prices down until after two months had passed.

"There is a psychological effect if the dollar goes cheap," he explained.

Bambang said the political outlook had improved compared to the first half of 2001, which was marred by political infighting and security problems up until former president Abdurrahman Wahid's ouster.

"At this moment we don't see the political rivalry leading to unrest. So that is a good sign," he said.