Prices of used cars go down but fewer people purchasing

Prices of used cars go down but fewer people purchasing

Damar Harsanto, The Jakarta Post, Jakarta

As the rupiah gains strength against the U.S. dollar these days,
the prices of some imported goods have gone down slightly. Yet,
used car vendors at the Jakarta Fairground in Kemayoran, Central
Jakarta - the largest one in the city - complained on Thursday
about sluggish business.

"Our sales have plunged sharply, by up to 50 percent, down to
12 units on average per month this year from 25 units last year,"
said Heriyanto, the owner of Sentral 2000 car dealership.

He attributed the bleak market to the lower purchasing power
of consumers.

"Many people prefer selling cars than buying a new one. It's
due to oversupply in the market which in turn puts pressure on
the prices."

He said the average price for a car had decreased by 20
percent compared to last year.

About 70 percent of his buyers purchase cars on credit, the
rest with cash.

Another vendor, Norman, revealed that the market was bleak in
the wake of recent floods in February this year.

"Many people decided not to purchase used cars because they
fear that the cars on display would be in poor condition due to
the floods," said Norman, who owns the Norman Mobil dealership.

Norman sells between seven and 10 units a month.

The best selling vehicles were made in 1997 and earlier and
include most of the popular Japanese makes such as Toyota, Honda
and Suzuki, most of which are Rp 100 million (US$10,480) or less.

Vendors said that Kemayoran became a major used car and spare
parts center in the capital around 1996 as many dealerships in
Senen, three kilometers away from Kemayoran, moved after they
were burnt to the ground in a massive fire.

"Many people have also moved their showrooms, from Cideng and
other places to Kemayoran following the May riots in 1998," Yono,
one of the mechanics said, referring to the social and political
upheaval which led to the downfall of former president Soeharto.

As a major used car center, Kemayoran is also visited by
people from outside Jakarta.

Totok, a dealer, revealed that he had recently sold a 1995
Honda Cielo for Rp 112 million. "The new owner said he would
drive it to Bali."

According to Vera, who bought a Toyota Corolla Twin Cam
Limited Edition for Rp 57 million on Wednesday, many people went
to Kemayoran as there were a wide range of choices and the price
was lower than in other places.

"I have visited several dealerships in Klender in East Jakarta
and Fatmawati in South Jakarta before," she said.

Vera, however, warned that the consumers had to be cautious in
choosing cars there as not all cars on display were in good
condition.

"You must go along with your own mechanic or else they will
try to deceive you with clean, freshly painted cars, but with
engines in poor condition," Vera said.

According to Heriyanto, most visitors to Kemayoran were
generally serious buyers because the access was difficult due to
the lack of public transportation in the area.