JAKARTA, Indonesia,
Feb. 28, 2015 /PRNewswire/ -- Frost
& Sullivan is expecting total vehicle sales in Indonesia to grow 5 per cent year-on-year to
reach 1.268 million units in 2015, mainly driven by the higher
purchasing power from the middle class population and
infrastructure development spending by the Government.
Mr. Vivek Vaidya, Vice President,
Automotive & Transportation Practice, Asia Pacific at Frost & Sullivan said that
the estimated stable growth of the Indonesian economy at 5.5 per
cent this year will also help drive vehicle sales.
However, he added that the global economic uncertainty is likely
to have a significant impact on the automotive sector as imports of
both parts or components and completely built-up (CBUs) will become
more expensive. "The increase in cost of automotive imports could
have a significant impact as high value parts and aggregates are
still imported for many models," he said.
He also said that imported CBUs, especially luxury cars, are
likely to become more expensive. LCGC cars will be least impacted
due to a high degree of localization, he added.
Mr. Vaidya said that the evolution of ASEAN Economic Community
(AEC) is likely to be a game changer for the regional industry,
with impact across the value chain.
He added that over the next 5 years, the Indonesian automotive
sector will be defined by five key themes - LCGC/LEC Program, the
next generation FTAs, focus on exports, competition from the Thai
Auto Sector and the evolution of AEC.
2014 Vehicle Sales Review
Mr. Vaidya said that in 2014, Indonesia's total industry volume (TIV)
declined 1.8 per cent year-on-year to 1.208 million units after 5
years of continuous growth, mainly due to the 6 per cent slump in
commercial vehicle demand.
He added that the economic slowdown and demand contraction in
key export destinations like China
and Japan also contributed to the
decline in vehicle sales in 2014. "The lower economic growth of 5.1
per cent, increase in tariffs - electricity, wages and luxury taxes
also further contributed to the weak auto sales in Indonesia," Mr. Vaidya said.
However, despite lower vehicle sales, Indonesia still overtook Thailand as the largest automotive market in
ASEAN. Mr. Vaidya said that Indonesia's share in the overall ASEAN pie
increased to 38 per cent of the total ASEAN market, leaving a
bigger gap of 11 per cent with Thailand.
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Media Contact:
Shena Agusta
Corporate Communications – Indonesia
P: +6221 571 0838
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Email: shena.agusta@frost.com