Declining New Car Sales in Indonesia Throughout 2024

Sluggish New Car Sales in Indonesia Throughout 2024

Declining New Car Sales in Indonesia Throughout 2024

Dream - The first six months of 2024 have been a challenging period for players in the automotive industry. Domestic car sales have been sluggish until the end of the first semester of 2024.

"Luckily, the export market has become a savior with an increasing sales trend. Acting Director General of Metal Industry, Machinery, Transportation Equipment, and Electronics (Ilmate) at the Ministry of Industry, Putu Juli Ardika, stated that the sluggishness of domestic car sales was triggered by the decrease in purchasing power."

"The weakening purchasing power of the society is triggered by the increase in the trend of new car prices that is not accompanied by the income of the society. 'The problem is that the inflation of vehicle prices has increased significantly, while salaries have not increased much, so it is the per capita income that causes (sluggishness) in purchasing power,' said Putu quoted from Merdeka.com, Thursday, July 11, 2024."

Putu mentioned that the sales of new cars in 2014 reached up to 1.2 million units. While the sales of new cars throughout 2023 only amounted to around 1 million units. "So, one of the first causes is the purchasing power of the society," he emphasized.

Apart from that, he mentioned that the decline in domestic car sales was also caused by the implementation of Financial Services Authority (OJK) Regulation Number 22 of 2023 concerning Consumer and Community Protection in the Financial Services Sector. The regulation tightens credit distribution by multifinance industry players.

Considering, in the regulation of POJK Number 22 of 2023, it strengthens the regulation of ethics and credit collection time. However, the majority of new car consumers make purchases on credit. However, the company is not too concerned about the sluggishness of domestic car sales. Considering, in the near future, there will be a large-scale automotive exhibition that can boost new car sales in the domestic market. "Because soon there will be GIIAS, there will be a lot of transactions happening," he said.

Quoting GAIKINDO data, domestic car sales figures are below the target of 1.05 million units throughout 2023. The breakdown is as follows, wholesale car sales reached 1 million (1,005,802) units throughout 2023, a decrease of 4 percent compared to the achievement throughout 2022, which was 1.04 million (1,048,040) units.

In addition, retail sales throughout 2023 reached 998,059 units. This figure decreased by 1.5 percent compared to 2022, which reached 1.01 million (1,013,582) units.

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