Indonesia’s new vehicle market declined by almost 7% to 80,416 units in July 2023 from 86,256 units a year earlier, according to member wholesale data compiled by local automotive industry association Gaikindo.
The vehicle market has rebounded strongly over the last two years with volume returning to pre-pandemic levels last year. The economy expanded 5.2% year on year in the second quarter of 2023 after an upwardly revised 5% growth in the first quarter, driven by stronger domestic consumption and investment. Domestic growth this year has been supported by a rebound in domestic and international tourism, offsetting the impact of the central bank’s interest rate hikes from 3.5% to 5.75% over the last year.
Vehicle sales in the first seven months of 2023 expanded 4.5% to 586,401 units after growing 22% to 561,287 in the same period of last year, helped by recent new model launches and as last year’s supply chain bottlenecks eased. Sales of passenger vehicles rose by 6.5% to 447,584 units while commercial vehicle sales were 1.5% lower at 138,817 units.
The government cut sales tax on battery electric vehicles (BEVs) to zero in May to help spur demand and is also encouraging purchases by government departments. It wants to expand the country’s EV charging network to help achieve its target of 2m BEVs in circulation by 2030.
Toyota sales increased 6% to 190,305 units year to date (YTD) while Daihatsu sales were up 8% at 115,061 units helped by the launch of the updated Ayla small car. Honda recovery continued with sales rising by 18% to 85,318 units helped by new models including the recent arrival of the WR-V while Suzuki sales declined 4% at 47,166 units.
Mitsubishi sales plunged 23% to 44,791 units following strong growth last year. The company is currently increasing its production capacity in the country to 250,000 units per year, with plans to expand its model range to include its Minicab MiEV and the all-new XForce compact SUV which was unveiled last week. Vehicle production in the country increased by almost 6% to 824,777 units in the first seven months of 2023, while exports of built-up vehicles surged by 20% to 290,822 units.
