Potential stagnation By Akhmad Nurcahyadi With challenges on Indonesia’s economic activity this year and the ongoing concerns over the impact of higher inflation, the domestic automotive industry is expected to see another stagnant growth. The latest data (November) on 4W sales seem to prove that the 4W sales target in 2014 would not be achieved. Indonesia’s automotive association (Gaikindo) projected the total industry sales to reach 1.25mn units from 1.23mn units in 2013. Yet, due to the increasing fuel price and Indonesia benchmark rate, most of the consumers prefer to postpone their spending. Year-to-date November cumulative 4W sales came in at 1.12mn units which was lower compared to that during the period in 2013 (1.23mn units). Similarly, 2W sales need another 396,326 units to at least reach the same FY13 2W total sales of 7.77mn units. This number falls below the target of 1.25mn units for car sales and 7.9mn units for motorcycle sales. Hence, Gaikindo forecasted that by the end of this year total 4W sales should drop by around 0.8% compared to total sales last year. Regardless of the mounting worries, domestic automobile manufacturers continue to diversifying its product line up this year to maintain their sales. In our view, automobile manufacturers are trying to survive from the still competition. New products are consistently being launched, while existing products are also continuing being rejuvenated. According to the latest figures announced by the Gaikindo total January to November sales figures on low cost green cars came in at 159,905 units. The figures were 14.15% of the total January to November total 4W sales. This year, we believe the automotive industry should remain pressured. The increasing fuel price last year, which historically impacted only 2 to 3 months of sales is likely to last longer (around 6 months) , due to the domestic macro conditions. #DailyFocus ow.ly/GUh6i
Posted on: Wed, 07 Jan 2015 01:29:08 +0000
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