Vehicle sales growth to hit the brakes in next year

Tb. Arie Rukmantara, The Jakarta Post, Jakarta

Soaring inflation, higher interest rates and increased fuel prices may result in a downturn in vehicle sales growth next year, the country's two automotive market leaders, PT Toyota Astra Motor (TAM) and PT Indomobil Sukses Internasional, estimate.

TAM president director Johnny Darmawan said next year's national car sales would grow by a just few percent or only match this year's sales figure.

"There are many things we cannot predict, such as whether any Cabinet shakeup will get a positive market response or inflation will slide to a single digit next year," he said on Tuesday on the sidelines of the launch of the New Vios compact sedan.

Johnny said this year's car sales would reach between 510,000 and 530,000, less than the Association of Indonesian Automotive Manufacturers' estimation of 550,000.

"The sector that finances car sales has also slowed down in past months, particularly due to increasing interest rates," he said.

Indomobil president director Gunadi Sindhuwinata gave a lower figure. "There is a possibility of declining sales," he was quoted as saying by Antara. "Sales next year may stand at only 500,000 or less."

Johnny said the government could help boost car sales next year by keeping its promise to reduce inflation to a single digit and carry out its mega infrastructure projects.

"If projects offered at the (January) Infrastructure Summit are realized next year, they will eventually boost automotive sales," he added.

Despite the economic woes, Johnny believes TAM will reach its sales target. As of September, TAM controlled 31.9 percent of the national car sales, which stood at 439,804 vehicles.

"In total, this year TAM will dominate 32 percent of the country's market, 2 percent higher than our target," he said, adding that the surging sales of Kijang Innova and Avanza played a major role in the increase.

While sales of Indomobil -- manufacturer and sales distributor of Audi, Mazda, Nissan, Renault, Suzuki, Volvo and other brands -- stood at 91,644 vehicles in the first nine months of the year. The figure is a 26.2 percent rise from the 72,635 vehicles it sold in the same period last year.