Gaikindo conservative on 2001 car sales prediction
Gaikindo conservative on 2001 car sales prediction
JAKARTA (JP): Continued political uncertainties will likely
weigh on car sales in 2001, as consumers become more cautious in
making new purchases amid fears of social unrest, according to an
auto association executive.
Bambang Trisulo, chairman of the Indonesian Association of
Automotive Industries (Gaikindo), said he expected car sales to
reach only some 300,000 units next year, about equal to this
year's estimated total sales.
He said that the industry's prediction of car sales for next
year ranged between 270,000 and the more optimistic estimate of
320,000.
"We're conservative about our prediction," Bambang told
reporters last week.
The current volatile political situation would likely extend
to next year and affect consumers' buying intentions, Bambang
added.
Car sales, he said, were quite sensitive to the political
outlook.
According to him, consumers usually delay buying cars on signs
of political turbulence that could result in social unrest.
The upcoming implementation of regional autonomy added to the
political as well as economic uncertainties, according to
Bambang.
With regional autonomy in sight, local administrations, for
instance, might impose excessively high fees for car ownership
transfers, he said.
"It is not clear yet who will be in charge of administering
car ownership transfers," Bambang explained.
But the central government, he added, was drafting guidelines
for what it saw as appropriate pricing policies for such
transfers.
"Regional administrations can then use the guidelines to set
their own pricing policy in accordance with their local needs,"
he said.
The launching of new models could fuel consumer purchasing,
but this year's political and security conditions have been
generally bleak, he said.
Based on Gaikindo data, car sales plunged to 53,303 units in
1998 when the economic crisis hit its peak, from 386,691 in 1997,
but began to rise the following year to 93,843 as the economy
slowly recovered.
In 1998, car prices nearly tripled, whereas people's
purchasing power dropped by more than half as the rupiah
depreciated to almost 80 percent against the U.S. dollar.
Gaikindo has said that a stable rupiah rate and declining
banking interest rates would result in a higher demand.
Last January, the association estimated that car sales for
this year would reach only 160,000 units, which was considered an
optimistic prediction at the time but which turned out to be
overly pessimistic.
This year, sedan sales were likely to jump to about 47,770
units from only 11,041 last year, according to Gaikindo data, and
light van sales to 211,900 units from last year's 67,718.
Truck, jeep and bus sales would likely reach 40,330 units, up
from last year's 14,084 units.
As in previous years, sales of multi-purpose vans take up the
lion's share of the national car market.
This segment is dominated by the Toyota Kijang but Daihatsu's
Zebra and Espass have also become increasingly popular.
Albeit a newcomer, Korean automaker Kia with its Caravan
family van has gained a sizable market share this year,
outselling its Japanese competitors.
The year 2000 also saw the entrance of minicars of various
makes, with an eye on the potential market created by Jakarta's
crowded streets. These include Hyundai's Atoz, KIA's Visto and
the A-class Mercedes.
Bambang predicted that consumers' preferences would likely
continue to be for Kijang due to the prevailing security
concerns.
"The reason is more cultural. A model like Kijang is not seen
as luxurious and does not portray an excessively affluent
appearance that could incite social jealousy," he said.
However, he warned of new competition next year from the
Chinese automakers who have been gearing up to make their debut
in the Indonesian market.
According to him, the Ministry of Industry and Trade has
registered some 10 importers of Chinese vehicles.
They would penetrate the Indonesian market with vans, priced
10 percent to 20 percent cheaper than existing models, Bambang
predicted.
"But this is fine with us, as long as their pricing practices
are transparent," he added.
He dismissed worries that Chinese cars would flood the
domestic market and severely hurt local assemblers, as Chinese
motorcycles did this year.
One year after their debut here, Chinese motorbikes have
gained some 20 percent of the total domestic market.
"Consumers have different buying considerations for cars and
motorcycles," he explained.
Unlike motorcycles, cars are more sophisticated and offer a
richer variety to consumers to choose from, according to Bambang.
"As the motorcycles sold here look very much alike, consumers
just go for the cheaper price. But it is different with cars. You
really want to get a good look before you choose a model,"
Bambang noted.
Chinese cars, he added, would depend primarily on their lower
prices in their attempt to make inroads into the local market.
As for quality, he added, that would depend on which part of
China the cars would be imported from.
Bambang said manufacturers in the northern part of China
produced low quality cars and sold them at very low prices,
whereas manufactures in the southern part were known for their
high quality cars.
"They (Chinese cars) will definitely eat up our market share
once they enter, but time will have the final say," Bambang said.
(bkm)