Indonesia’s automotive industry association, Gaikindo, dramatically slashed its full-year 2024 estimates for the country’s new vehicle last week, in light of the sharp decline in wholesale deliveries year-to-date.
The association’s chairman, Jongkie Sugiarto, confirmed he now expects full-year sales to fall by 15% to 850,000 units in 2024 after forecasting 1.1 million units at the beginning of the year, adding “this reduction in the target is based on low sales figures that have not shown significant improvement.”
The latest data collected by the association shows vehicle wholesales in the country fell by 16% to 633,218 units in the first nine months of 2024 from 755,778 in the same period of last year, with high interest rates holding back domestic economic activity including consumer spending.
The government is stepping up its efforts attract foreign direct investment (FDI) in the country’s automotive sector. On his first overseas trip later this month, Indonesia’s new President Prabowo Subianto plans to meet with the leaders of Volkswagen and Ford at the G20 summit in Brazil to discuss investments in vehicle manufacturing plants in the country.
Volkswagen group has a very limited presence in South-east Asia, while Ford recently returned to the Indonesian market with imports from Thailand after a ten-year absence. During his month-long trip, President Prabowo will also attend the Asia-Pacific Economic Cooperation (APEC) summit in Peru, before official visits to the US and China.
Indonesia’s Chief Economic Minister, Airlangga Hartarto, who also served under the previous President Joko Widodo, this week announced the government is considering reintroducing tax incentives for the purchase of battery electric vehicle and homes as it looks to stimulate consumer spending.
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