Recovery Seen for Indonesia’s Auto Sector in June

  • 2020-07-23 12:00:00
  • Reporter

Car sales in Indonesia rebounded strongly in June, rising more than threefold during the month to 12,623 units from a record low 3,551 units in May, according to Gaikindo (Association of Indonesian Automotive Manufacturers) data. Despite the recovery, sales were almost 79% lower than in June last year.

During the January to June 2020 period, sales fell 46% to 260,933 units, compared to the year-ago period.

Auto industry analysts caution that a rise in coronavirus infections in Indonesia will have a severe negative impact on the auto sector, as well as slowing growth.

Due to the imposition of large scale social restrictions (PSBB) in several cities across Indonesia to halt the spread of COVID-19, the country’s automotive industry was badly affected. Auto sales plummeted in April and fell even further in May, falling 95% during the month, compared to May 2019 figures.

Some analysts believe the rebound in auto sales in June was most likely due to  pent up demand, since most car dealerships were closed for over two months due to the partial lockdowns.

 Auto sales are expected to rise further, though at a slow pace, during the second half of 2020. For the whole year, auto sales are seen falling by 30 to 40% to around 600,000 to 700,000 units, compared to the 1.05 million units sold in 2019. Gaikindo cut its domestic car sales target this year by 40% to 600,000 units and has reduced the country’s car export target to 175,000 units this year, from the initial target of 350,000 to 400,000 units, based on a report in the local press.

During recent years, Indonesia has posted national car sales of around 1 million units per year.

Based on Gaikindo data regarding four-wheeler auto production, February saw 82,000 units being produced, rising to 89,000 units in March. The numbers fell in April and plunged the following month- with just 1997 cars produced in May. Production rose in June to 16,000 units.

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