Gaikindo sticks to target despite promising Q1 sales

The Jakarta Post, Jakarta

Even though several automotive industry players have expressed optimism that car sales may surpass their targets this year, the Association of Indonesian Automotive Manufacturers (Gaikindo) remains conservative with its 520,000-unit sales target.

"Although the first quarter sales were higher than our expectations, we are still worried about the impact of the fuel price hike in the future," Gaikindo chairman Bambang Trisulo said on Saturday.

Gaikindo recorded said this year's first quarter sales reached 143,986 units, with Toyota contributing the highest of those with 44,369 cars largely due to the popularity of its Avanza and Kijang Innova models.

Last year, carmakers sold a total of 483,417 vehicles -- both passenger and commercial vehicles and for both local and export markets. The sales were a 36 percent increase compared to 2003.

Bambang said although the first quarter sales were quite promising, Gaikindo would not revise its target for the second quarter.

"Steel supplies for commercial vehicles, particularly big trucks, for May, June and July would be absorbed by the Chinese market due to the progressive development there," he said.

"We hope there won't be any short supply for steel needed to produce passenger cars."

PT Toyota Motor Manufacturing Indonesia had said earlier that sales would rise to 540,000 units although the growth remains slow on concern that higher interest rates and a weaker rupiah would dampen demand.

PT Hyundai Indonesia Motor president director Jongkie D. Sugiarto said the company would not revise its sales target either.

"We hope to sell a total of 13,500 cars this year by getting a more efficient supply from our Korea headquarters," he said.

Hyundai missed 10 percent of its first quarter target sales due to lack of supply.

Meanwhile, PT Nissan Motor Indonesia said that sales in this year's first quarter was 3,627 units, a 50 percent rise from last year's 2,375.

"Overall, the 2005 quarterly sales record is in line with the monthly targets of the various Nissan cars sold," the firm's president director Norio Ota said in a statement.

PT Honda Prospect Motor recorded sales of 3,412 units in the first quarter, putting the company as the market leader in sedan with 46.8 percent market share excluding taxis.

Apart from steel supply, another problem faced by the automotive industry players is legal certainty and other discouraging government policies.

One example was the government's recent issuance of a regulation on import tariff cuts on spare parts, components and buses from China.

The government argued that the move was to help public transportation operators minimize maintenance costs, thus enabling them limit their fare hikes to less than 10 percent following March 1 fuel price increase that averaged 29 percent.

Bambang also said used vehicles entering the country, despite whatever the government's argument is, would eventually bring a negative impact on the investment climate.