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.