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Car Sales Rise 12% Despite Japan Blip, Gaikindo Says
Shirley Christie | July 03, 2011

More than 400,000 cars were sold in the first half, on track for the full-year target of 830,000. (JG Photo) More than 400,000 cars were sold in the first half, on track for the full-year target of 830,000. (JG Photo)
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Car sales in Indonesia rose in the first half, lifted by strong domestic consumption, and are on track to meet this year’s target, according to a major automotive industry association.

There were 415,276 units sold from January through June, up 12 percent from 370,214 units in the same period a year earlier, data from the Indonesian Automotive Industries Association (Gaikindo) showed.

Jongkie Sugiarto, Gaikindo’s deputy chairman, said on Sunday that the strong first-half figure would pave the way to achieving the group’s full-year sales target, now set at 830,000.

Strong consumer purchasing power and relatively stable interest rates helped to boost demand for cars, said Jongkie, also the president director of Hyundai Motor Indonesia.

Gaikindo had lowered its 2011 sales target from 850,000 to 800,000 shortly after the March 11 earthquake and tsunami crippled Japan, a world leader in car manufacturing.

Jongkie said the disaster in Japan, from which Indonesia gets most of its car parts, did not significantly disrupt production or distribution locally, although sales declined slightly from April through June.

Japanese cars account for more than 90 percent of the local market, and Jongkie says he expects supply will return to normal this month.

He also said the 19th Indonesia International Motor Show, from July 22-31, would help boost sales. The annual event, set to feature 35 auto brands, will be held in Kemayoran, Central Jakarta.

Joko Trisanyoto, the marketing director of Toyota Astra Motor, expressed similarly bullish views on domestic auto sales.

Antara quoted Joko as saying on Sunday that he was optimistic car sales this month would be higher than June’s figure, without providing further details.

However, he said July sales would still be lower than the 82,166 units recorded in early March, before the earthquake  in Japan took its toll on the distribution of spare parts worldwide.

He also acknowledged that there had been “some disturbance” in the supply chain after the disaster, prompting Honda, Nissan and exclusive Toyota dealer Astra to hold their inventory despite rising demand.

Car sales in August and September, though, are likely to exceed the March total, with Indonesians expected to buy or lease more cars for travel during Ramadan and Idul Fitri, Joko said.

Looking a few years ahead, if macroeconomic conditions stabilize and interest rates do not rise too high, Jongkie forecasts car sales reaching 900,000 units in 2012 and exceeding one million units by 2014.

Under Indonesia’s car purchasing program, banks finance 70 percent of the vehicle. The central bank’s key interest rate currently stands at 6.75 percent, providing room for automotive financiers to give a relatively affordable rate.