ID/Damiana N Simanjuntak
Serasi Autoraya, a car rental and used car sales company, has allocated Rp 2.7 trillion ($286 million) to capital expenditure this year, and spent about a third of that in the first half as it looks to expand its business.
The company has said that some of the money will be used to add cars to its fleet, which is expected to boost business by up to 24 percent this year.
Jefri R. Sirait, a director at Serasi, said over the weekend that the company had spent Rp 870 billion on capital expenditure in the first half of the year.
Serasi, a unit of Astra International, the country’s biggest automotive distributor, plans to add 4,000 cars this year, which would lift its fleet to 37,000 vehicles. Serasi rents cars and sells used vehicles through its brands Trac, O-Renz Taxi and Mobil 88. The company has almost 3,000 customers across the country.
Indonesia’s growing economy and per capita income has increased demand for car rentals and sales, for both new and used vehicles.
Gross national income per capita rose to $3,720 in 2009 from $2,200 in 2000, according to a World Bank report.
However, car sales in the country could face a slowdown thanks to new rules put in place to avoid a bubble in the sector. Since June 15, the central bank and the Finance Ministry have required financiers, including banks and multifinance companies, to demand higher down payments from car buyers to help ensure loans don’t go bad.
Down payments were raised to between 25 percent and 30 percent of the price tag for cars and motorbikes. Previously, no specific government guidelines were given, but industry practice typically required a down payment of about 10 percent to 15 percent.
If business at Serasi suffers as a result of the new rules, it could have a knock-on effect on Astra International. Astra reported a 13 percent increase in net income to Rp 9.7 trillion in the first half of this year from Rp 8.6 trillion in the same six months last year.
Sales at Astra, the country’s biggest listed company and one of Indonesia’s largest diversified conglomerates, rose 26 percent to Rp 96 trillion in the same period.