Gaikindo expects higher car sales
Gaikindo expects higher car sales
JAKARTA (JP): The association of Indonesian Automotive
Industries (Gaikindo) revised its 2001 car sales forecast to
280,000 from 250,000 following higher-than-expected sales in
April and May.
Gaikindo chairman Bambang Trisulo said on Thursday that car
sales this year would now only be slightly lower than last year's
300,000 units.
"We can expect a better sales figure this year," Bambang said
during a media briefing to promote Gaikindo's July 21 to July 29
auto exhibition at the Jakarta Convention Center.
Gaikindo initially forecast this year's car sales to fall to
250,000 units due to a plan to hike taxes, slower economic
growth, and domestic political uncertainty.
He said that several members of the association had even
predicted that 2001 car sales would reach last year's level.
"But I'm more conservative because their forecasts are based
on the results of the last two months when people have been
purchasing cars based on expectations that prices would go up in
June or July," he said.
Bambang said that car sales in April and March reached 29,000
per month, higher than Gaikindo's forecast of 22,000.
He explained that people rushed to buy cars during the period
in anticipation of coming higher prices as the government had
earlier announced plans to introduce higher value added tax
(VAT), luxury tax and import taxes.
He said that car sales for the first half of this year totaled
148,000 units, a 13 percent growth compared to sales in the same
period last year.
The government is determined to use tax as the main source of
revenue to help contain the 2001 state budget deficit within a
safer level of around 3.7 percent of gross domestic product
(GDP).
But the government dropped the plan last month to raise VAT to
12.5 percent from the current 10 percent.
The government has also yet to implement the plan to increase
import taxes and luxury tax on car sales.
But Minister of Trade and Industry Luhut Pandjaitan said
earlier that the government would proceed with the plan, aiming
to raise around Rp 330 billion (US$29 million) in additional tax
revenue from the automotive industry.
"Many bad things which had been predicted, did not
materialize. We even managed to beat our monthly sales target
instead," said Bambang.
Bambang said that car prices were expected to increase by an
average of 20 percent to 30 percent this year if the government
proceeded with the tax increase plan.
He said that the recent 30 percent increase in fuel prices and
20 percent in electricity rates contributed little to production
costs in the automotive industry.
He said that the biggest contributor to the price increase
would be taxes and the weakening of the rupiah against the U.S.
dollar.
The rupiah has been under pressure, hovering at Rp 11,555 per
dollar, due to a combination of domestic economic woes and
political instability.
The domestic car industry is heavily dependent on imported raw
materials.
"Car prices will be increased gradually, on average 5 percent
every month, to maintain a relatively stable sales volume,"
Bambang said.
He said that with the increase in car prices, sales in the
second half would be slower than the first half.
He added that the plan of the People's Consultative Assembly
(MPR), to hold a special session on August 1 aiming to impeach
President Abdurrahman Wahid would affect sales.
There have been fears that if the MPR proceeded with its plan,
it could trigger conflict between the President's fanatic
supporters and opponents.
"We're not too sure what the situation will be in August and
after August," Bambang said.(03)