Interest rate hits auto sales: Analyst

Interest rate hits auto sales: Analyst

JAKARTA (JP): Domestic automobile sales tumbled in the first
nine months of this year, falling 17 percent over the same period
last year to about 230,000 vehicles, according to the Indonesian
Automotive Industry Association.

First-category commercial vehicles were worst affected,
including multipurpose vans such as the Toyota Kijang and Suzuki
sidekick. Only 155,670 commercial vehicles were sold, down 20
percent, according to the association.

Automotive analyst Suhari Sargo said yesterday the drop was
caused by tight monetary policy rather than by the government's
national car policy.

"Commercial vehicles in the first category are the most
popular automobiles here. Sales of vehicles in this category
dropped seriously because of the government's efforts to reduce
the public's liquidity," Suhari said.

But the government's attack on liquidity has not seriously
affected sedan sales, which remained flat in the first nine
months of this year. Approximately 27,000 cars were sold.

"People buying sedans are mostly in middle and high-income
brackets, and therefore their car-buying patterns were not
affected by tightening liquidity," Suhari said.

He acknowledged the launch of the Suzuki Baleno, Bimantara
Cakra and Bimantara Nenggala sedans, with prices closer to first-
category commercial vehicles, had stolen some of the market from
the commercial vehicles.

First-category commercial vehicles, which are mostly used as
passenger vehicles, make up more than 60 percent of the country's
auto market. Sedans make up less than 10 percent of the market.

Trucks

Suhari said sales of third-category commercial vehicles, heavy
trucks, had fallen 30 percent to some 8,700 units.

Because of tightening monetary policy, people wanting to buy
heavy trucks have canceled their plans and bought cheaper second-
category commercial vehicles instead, Suhari said.

Sales of second-category commercial vehicles, light trucks and
multipurpose commercial vans, remained steady at 36,900 units.

Suhari said the entrance of duty-free national cars, Timor
cars, from South Korea failed to stimulate the auto market.

Some 8,000 Timor cars, produced by Kia Motors Corp. of South
Korea for PT Timor Putra Nasional, have entered the country. But
only about 1,000 of the cars have been delivered to customers.

"It shows that Timor cars have not yet won the hearts of most
Indonesian auto users," Suhari said. (rid)