Indonesia: According to market research firm Frost & Sullivan, car sales in Indonesia are expected to grow 4.6 percent year-on-year in 2018. This is supported by growing domestic demand for commercial vehicles, stable demand for low-cost green cars (LCGCs), the availability of affordable car prices, and the launch of new car models.
Several factors are at play which will affect sales in the Indonesian automotive industry. Firstly, the Indonesian government has set its economic growth target at 5.4 percent year on year in 2018, up from an estimated 5.1 percent year-on-year in 2017. Purchasing power and consumer confidence should therefore be strengthening.
Other factors that would likely contribute to car sales include low inflation, a stable rupiah exchange rate and the relatively low interest rate environment in Indonesia.
The Indonesian Automotive Industry Association (Gaikindo), however, has set a more conservative target of 1.1 million units for car sales in 2018, a two percent increase from last year’s estimated sales of 1.07 million units.
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