New vehicle sales in Indonesia fell by 14% to 76,304 units in August 2024 from 88,876 units a year earlier, according to wholesale data compiled by automotive industry association Gaikindo.
Vehicle sales have been in decline for well over a year, after rebounding strongly in the previous two years from the pandemic lows. Market sentiment had weakened significantly this year as purchasing power continued to be eroded with consumers increasingly shunning large purchases. Bank Indonesia had hiked its benchmark interest rate to 6.25% from a low of 3.5% two years ago, as it focused on containing inflation and on supporting the rupiah.
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The vehicle market declined by 17% to 560,619 units in the first eight months of 2024 from 675,287 in the same period of 2023, with sales of passenger vehicles falling 16% to 435,823 units while commercial vehicle sales plunged 21% to 124,796 units.
Toyota sales declined 17% to 182, 917 units year to date (YTD) while deliveries by subsidiary Daihatsu were down 15% at 113,173 units; Honda 61,394 units (-37%); Mitsubishi 48,383 (-7%); and Suzuki 43,808 units (-19%).
Overall vehicle production fell 18% to 779,235 units in this period while exports of assembled vehicles dropped 11% to 298,691 units.
Battery electric vehicle (BEV) sales almost tripled to 23,330 units in the first eight months of the year, most of which were Chinese models. The best seller was the Wuling Binguo small car priced from IDR317m (US$20,550) with 3,876 deliveries YTD, with the company also selling 1,655 Air BEVs. BYD delivered 6,461 BEVs after it launched sales operations in June while Chery sold 3,485 Omoda E5s, followed by Hyundai and SAIC Motor.
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By GlobalDataHyundai began sales of the locally produced Kona Electric small SUV in July, powered by batteries produced at its local joint venture plant with LG Energy Solution, while GAC Aion’s local distributor Indomobil launched sales of the Y Plus BEV last month.
Earlier this year the government said it was targeting 50,000 BEV sales in 2024, after it extended the sales tax discount (from 11% to 1%) until the end of 2024 to help drive up demand and attract inward investment. It has also suspended import duty on BEVs until the end of 2025 for companies investing in local production.
China’s Hozon Auto began local assembly of its Neta V-II BEV in August, after its imported Neta V went on sale in the country in the fourth quarter of 2023. The company said it was targeting local content of 60% and planned to export to other right hand drive markets in the region. BYD and Vietnam’s VinFast also plan to build BEV assembly plants.
