Gaikindo doubts 2001 sales target possible

Adianto P. Simamora, The Jakarta Post, Jakarta

The Association of Indonesian Automotive Industries (Gaikindo) expressed pessimism on Tuesday about the 2001 domestic car sales target of 300,000 units, following the recent fall of the rupiah against the U.S. dollar.

"The decline in the rupiah against the U.S. dollar will become a negative factor affecting car sales targets this year," Bambang Trisulo, the chairman of Gaikindo told reporters.

The rupiah dropped to as low as Rp10,500 per U.S dollar on Monday amid growing anti-U.S. sentiment following the U.S.-led attacks against Afghanistan.

The local unit, however, managed to recover slightly to 10,010 on Tuesday, compared with Monday's close of 10,163.

"If the rupiah remains below 10,000 against the U.S. dollar in the remaining months of this year, it will be difficult to meet the car sales target of 300,000 units," he said.

Gaikindo said total car sales to September were 227,000 units.

Bambang said that several local automotive producers were now decreasing their car prices amid tough market conditions, but the fall in the rupiah might continue to discourage people from buying cars.

Bambang also said that the association might have to revise its 2002 car sales target of 320,000 units if the military campaign between the U.S. and Afghanistan lasts for a longer period, as it would certainly lead to a global economic recession.

"The global economic slowdown will also pressure the 2002 car sales targets," he said.