Unexpectedly, this seems to be the explanation why Indonesian automobile gross sales fell 19%

Jakarta, CNBC Indonesia – Gross sales of recent vehicles in the course of the first semester of 2024 confirmed unsatisfactory outcomes. Based mostly on knowledge from the Indonesian Vehicle Industries Affiliation (Gaikindo), new automobile gross sales in January-June 2024 have been solely 408,012 items.

This quantity is down 19.4% in comparison with the identical interval final yr which was recorded at 506,427 items. And, month-to-month, automobile gross sales in June 2024 solely elevated by about 2.28% in comparison with Might 2024 which registered 71,306 items.

Based mostly on a examine by Gaikindo and the Financial and Social Analysis Institute, School of Economics and Enterprise, College of Indonesia (LPEM FEB UI), the explanation for slower gross sales is as a result of weakening of buying energy whereas the worth of recent vehicles is getting greater . In consequence, folks purchase automobiles at decrease car costs, their alternative is used vehicles.

“The worth of our automobiles has elevated dramatically, inflicting an even bigger and larger hole between the acquisition worth and earnings. Individuals who wish to purchase a automobile have completely different choices, particularly as a result of the worth of the automobile is far greater, the selection is to run to used vehicles,” mentioned Common Secretary Gaikindo Kukuh Kumara within the Trade Press Discussion board Dialogue (Forwin) on the Ministry of Trade, Wednesday (10/ 7/2024).

This case is mirrored in used automobile gross sales. In 2023, gross sales of used vehicles will enhance virtually 3 instances, that’s 1.4 million items in comparison with 2013, which was solely 500 thousand items in a single yr. This case was fueled by declining buying energy in addition to a rise in per capita earnings that was unable to maintain up with the rise in new automobile costs, which led customers to maneuver to purchasing used vehicles the place the market was turning into clearer (extra balanced).

“In truth, in 2023 in comparison with 2013 it would enhance 3x, from solely 500 thousand items to 1.4 million now, this development is because of unaffordability as a result of the worth of vehicles and earnings per capita rising additional aside,” mentioned LPEM UI Automotive Observer Riyanto.

Based mostly on the examine, the vast majority of automobile gross sales in Java are used vehicles, which is 63% all through 2023, whereas in Sumatra it’s not as excessive as in Java however it’s nonetheless dominant , which is 56%. The rationale for this development is that the worth of recent vehicles tends to fall. Moreover, used automobile platform web site visits have elevated from month to month.

“The worth of used vehicles has dropped in comparison with new vehicles over 2020, vehicles have dropped 50% for MPVs, so persons are lastly selecting used vehicles and the market is turning into extra balanced. Up to now, shopping for a used automobile was like shopping for a used automobile a automobile in a bag, now they’re informed in regards to the defects, they was hidden, the worth is that the defects are right here and there,” Riyanto mentioned.

(dce)