According to Association of Indonesian Automotive Industries (Gaikindo), domestic vehicle sales in March 2014 came in at 113,079 units, an increase of 17.8% year-on-year (y-o-y). Sales were boosted by the low-cost green car (LCGC) segment. This brought total Q114 sales to 328,354 units an increase of 10.9% y-o-y. For 2014, we forecast auto sales to grow 7.1%, to 1.32mn units.
We forecast the passenger car segment to continue outperforming the commercial vehicle (CV) segment in 2014. That said, we expect a slight deceleration in car sales growth to 8.5%, in 2014. One factor responsible for the resilience in vehicle sales towards the end of 2013 was the introduction of the Low Cost Green Car (LCGC) segment in September 2013, which recorded sales of over 50,000 units in 2013. The availability of fuel-efficient variants in this segment will give consumers an alternative in an environment of higher pump prices and we see these eco-car models continuing to buoy passenger car sales in 2014. Another factor which could buoy private consumption is the increased spending by political parties (in the form of cash handouts) in the run-up to the July 2014 elections.
That said, our Country Risk team believes that inflation will remain fairly elevated in 2014 and this will erode consumers' purchasing power ( see 'Mounting Headwinds Despite Consensus-Beating Growth', February 6). Furthermore, this is likely to keep Bank Indonesia's hawkish stance unchanged at least in H114. With 70% of auto sales requiring some form of financing, we cannot neglect the impact of higher interest rates on consumer loans, and our lower passenger car sales growth forecast for 2014, compared with 2013's performance, reflects the risk of tighter credit conditions.
On the other hand, the CV segment is set to face a more challenging time, especially for the first half of 2014, as high interest rates and political uncertainties weigh on the sector, leading us to forecast CV sales growth of just 3.4%. We...
The Indonesia Autos Report features the latest data and forecasts covering production, sales, imports and exports.
Business Monitor International (BMI)'s Indonesia Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the automotives market in Indonesia.
- Benchmark BMI's independent automotives industry forecasts on Indonesia to test other views - a key input for successful budgetary and planning in the Indonesian automotives market.
- Target business opportunities and risks in the Indonesian automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Indonesia.
- Assess the activities and market position of your competitors, partners and clients via our Competitive Landscape Analysis.
BMI Industry View
Summary of BMI's key industry forecasts and views, covering production, sales and the introduction of new technology or products.
Global, Regional and Country Industry Overviews
In-depth analysis of the major global and regional developments in the market, which can be linked with the country industry overview, providing cross-country investment, product and financing trends that will affect each market, supported by BMI’s global and regional industry forecasts.
Business Environment Rankings
BMI's proprietary Autos Business Environment Rankings are a unique country-comparative Risk-Reward Rankings index that separately analyses the risks and rewards of operating in each market. It is aimed at investors (including manufacturers, suppliers and dealers) who seek to either identify and compare market opportunities, or evaluate country-specific operational challenges.
The rankings methodology makes sophisticated use of over 40 industries, economic and demographic data points.
BMI Industry Forecasts
Historic data series and forecasts to end-2018 for all key industry indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:
Total production value (US$bn); total production of units; production by vehicle-type (including cars, commercial vehicles, trucks and buses); total sales value (US$bn); sales by vehicle-type, including passenger cars and commercial vehicles (vans and microbuses, pickups, trucks and buses, 4 wheel drive); total exports by value (US$bn) and by units; total imports by value (US$bn) and by units; contribution to GDP; employment in industry.
BMI Economic Forecasts
BMI forecasts to end-2018 for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.