Gaikindo sticks to target despite promising Q1 sales

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.