Car sales fast and furious in Indonesia

JAKARTA: Car ownership is not for the fainthearted in Indonesia, thanks to erratic fuel supplies, awful roads and hilariously high price tags. Yet new auto sales are overtaking expectations despite an economy still stuck on the hard shoulder. 

A brand new family car can cost as high as 280 million rupiah (RM115,000), an extraordinary sum in a country where most people struggle to survive on a few dollars a day. 

But the first half of this year saw sales rise sharply, with 226,155 new vehicles hitting the highway – a 32% increase from the same period last year, according to Indonesia's Automotive Industries Association. 

The association said it expected car sales in the country to grow to 500,000 units next year from 420,000 estimated for this year. 

Exports are also increasing, with a steady trickle of vehicles making their way to Indonesia's neighbours, reversing a tide of imports from the regional automotive powerhouses of Thailand and Malaysia. 

IN THE AUTO PLANT: PT Toyota-Astra Motor national service service division manager Rusli Lubis speaking to his assistant manager Darma Bayu (right) and an employee in Jakarta on Friday. Lubis said Toyota Astra Motor saw sales rise sharply for the first half of this year. - AFPpic

While the figures are unlikely to set the global motoring industry alight, they mark a significant gear shift for Indonesia, which has admitted it is losing the regional race to recover from the 1997 Asian financial crisis. 

Industry experts say the secret of the sales, expected to maintain their momentum in coming months even as the economy palpitates over Sept 20 presidential polls, lies in Indonesian idiosyncrasies, chiefly consumer pride. 

For middle-class Indonesians, owning a new car is a common way of maintaining prestige in the face of financial hardships, says Jonfis Fandy, an executive of Japanese car firm Honda's local joint venture. 

He said the extraordinarily high resale value of used cars was also a factor, encouraging many people to invest in vehicle ownership rather than commit cash to low-interest bank accounts. 

The availability of low-cost loans means consumers are also willing to stretch their budgets by the slim margin needed to get their hands on the wheel of a new instead of a second-hand vehicle. 

“I believe the economy does not seem to be improving very well ? yet we are witnessing a significant growth in car ownerships. 

“Prestige is the main factor behind the growth,” said Fandy, sales chief for Honda Prospect Motor. – AFP  

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