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Indonesia Auto Market To Remain Stable

Indonesia: Vehicle sales in Indonesia is forecast to grow 4.6 percent in 2018 with commercial vehicles performing well, according to market intelligence company Frost & Sullivan.

The Indonesian automotive market is expected to remain resilient in 2018, and vehicle sales are likely to reach 1.125 million units. Commercial vehicles are expected to be in high demand, along with steady growth in the low-cost green cars (LCGC) and multi-purpose vehicle (MPV) segments.

Vivek Vaidya, senior vice president of mobility at Frost & Sullivan, said the long term factors such as gross domestic product (GDP) growth rate and favourable demographics point towards a strong long term growth rate.

“The upcoming car launches with new models, facelifts and variants especially for some key market models in MPV segments are expected to drive the sales. The commercial vehicle market will still continue to be fuelled by demand in the construction and infrastructure segment,” added Mr Vaidya.

“There is lot of pent up demand in the commercial vehicles segment. Due to production shortage the entire demand in 2017 could not be fulfilled, this demand is going to spill over to 2018, boosting the commercial vehicles sales further,” continued Mr Vaidya.

The consumer sentiment is expected to remain positive in 2018 largely due to positive economic outlook, stable exchange rate and reduction in prime lending rate. Despite strong long term growth indicators like GDP growth rate and strong demographics, passenger car sales declined. The LCGC segment continues to be a bright spot in the passenger vehicles market, growing 6.3 percent.

Mr Vaidya said that this shows that despite high consumer confidence indicators and long term growth trends, customers are being conservative and are buying value offerings.

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