CAR SALES EXPECTED TO DROP IN SECOND SEMESTER OF 2012

By Andi Abdussalam

Jakarta, July 23 (ANTARA) - Despite witnessing an increasing sales trend during the first semester, automotive manufacturers have predicted that domestic car sales in the country will fall in the second semester of this year.          Manufacturers predict that car sales will decline, following a decision by Bank Indonesia (the central bank) to raise the down payment for cars purchased on credits.       Indonesia's domestic car production reached 88,904 units thanks to an increasing demand and rising exports, thereby surpassing the average capacity of 75,000 per month seen in the first semester.          However, domestic car sales in the second semester of the year are expected to fall by 10 percent due to Bank Indonesia's rules that stipulate a minimum down payment of 30 percent for new vehicle loans.         "Bank Indonesia's new rules on down payment for motor vehicle loans will have an impact on car sales in the second semester," said co-chairman of the Indonesian Motor Vehicle Industry Association (Gaikindo) Johnny Darmawan.          The central bank, fearing an increase in nonperforming loans amid global financial crisis, has raised the down payment to 30 percent from its nominal 10 percent charges seen in the last month.  The central bank said that the regulation is aimed at ensuring greater prudence and to create healthy competition in the credit market.          Around 80 percent of owners in the country purchase cars on credits from banks and financial companies. These loans are expected to be repaid via installments. So far car sales have dropped between 10 and 25 percent, the Gaikindo chairman explained.          According to Sudirman Maman Rusdi, co-chairman of Gaikindo, the association has revised its car sales target down to 875,000 units for this year from the previous 948,500 units set earlier.          In the first semester of this year, domestic car sales reached a record of more than 500,000 units. Yet the second-semester car sales might drop by 10 percent, particularly following the Idul Fitri festivities that will fall in the fourth week of August.          Car sales, however, would still record growth in July due to a rising demand ahead of the festivities, he said. "But starting September, car sales are likely to fall," added Johnny, who is also the president director of PT Toyota Astra Motor.          The impact of the new ruling effective June 15, 2012 would be felt in the second semester, while car sales in June would remained unaffected, he said. "In fact, car sales in June hit a record of 98,000 units, up from the previous month. This was because many sales purchase contracts were made before the new ruling on the down payment for car loans took effect," he was quoted as saying.           Johnny noted that the new ruling has had an impact on motorcycle and heavy-duty equipment sales which dropped by around 30 percent.           Jodjana Jody of PT Astra International Tbk, the country's largest automotive company, said that 70 percent of prospective car buyers, with an estimated expenditure of below Rp150 million per unit, might delay their purchases due to difficulties in raising cash for the down payments.           The increase in the down payment has also caused a setback in the market for commercial cars and trucks. Jodjana said that 90-95 percent of Toyota trucks of PT Astra are sold on credits.           While domestic car sales are expected to decline in the second semester, production in the first semester surpassed the average monthly capacity of 75,000 units, reaching as high as 88,904 units.           "Car production in the first semester of this year reached 533,429 units with production in June estimated at 103,000 units. Monthly car production is meanwhile, only at 75,000 units out of a total capacity of 900,000 units a year. This means that car production during the first semester of this year has been above average by about 18.54 percent," said Gaikindo co-chairman  Yongki D Sugiarto.          Domestic car sales actually increased in the first semester of the year.          The sales of commercial pick-up cars in the first semester of 2012 rose by 20.56 percent to 87,356 units from the 72,404 units seen in the same period of the previous year.          "The sales of commercial cars for the pick-up trucks in the January-June 2012 period reached 87,356 units with an increase of 20.65 percent seen in the same period of the previous year with a total of 72,404 units," remarked Yongkie D Sugarto on Sunday.           Data at Gikindo showed that Daihatsu's market share for pick-up cars accounted for 22.04 percent. Head of Domestic Marketing Division of PT Astra Daihatsu Motor (ADM), Rio Sanggau, said that the sales of his company¿s Daihatsu Granmax pick-up cars were recorded at 19,260 units in the first semester of this year.           "The sales of Granmax pick-up cars from January to June 2012 increased by 5,742 units to a total of 19,260 units from the 13,518 units seen in 2011," he divulged.           In the meantime, Suzuki has dominated the pick-up market with a market share of 29.77 percent. The sales of Suzuki pick-up trucks in the first semester of this year reached 26,010 units with an increase of 40.46 percent compared to the 18,517 units sold during the corresponding period last year.           PT Suzuki Indomobil Sales said that it posted a 24.8 percent increase in car sales with 12,121 units accounting for June sales and with 9,712 units sold during the previous month.           Davy J Tuilan, the sales director of the Suzuki car agency in the country, said that the sales in June created an all-time monthly record after last month's peak of 9,712 units.  The sales in June represented a 68 percent year-on-year increase, Davy noted.           The sales were dominated by new Suzuki city car Ertiga, which contributed 36.3 percent of the total company sales, followed by Suzuki van Carry Futura, which accounted for 34.2 percent.          Other Suzuki cars sold in the country include APV, Splash, SX4, Swift, Estilo and Vitara.          Suzuki has the fourth largest market share in the country following Toyota, Daihatsu and Mitsubishi.          At the same time, the sales of Ford cars shot up by 51 percent in June, thereby recovering from a setback witnessed in the total sales during May.       Ford Motor Indonesia (FMI) said that its sales rose to 1,061 units in June with an increase of 51 percent from the previous month. "Ford is confident that the trend will continue through the second half of the year led by Ford¿s all-new Ranger and Ford Focus that are yet to be launched," IMI said in a statement recently.          The all-new Ford Fiesta contributed 499 units to the total sales in the month of June, the statement said.  "We will produce more Fiesta variants to provide the consumers with a wider alternative," said the company's president Bagus Susanto.          Bagus said that significant sales of 394 units were also recorded for the Ranger variant in June. He further added that orders for 1,000 more units will soon be released towards the end of July.          Car maker PT Mazda Motor Indonesia (MMI) sold a total of 4,836 cars in the first semester of 2012, with the Mazda 2 variant contributing nearly 60 percent to the overall sales, MMI marketing manager Astrid Ariani said here on Friday.          The BT-50 and CX-5 variants further contributed to the first-semester sales.          Astrid said Mazda recorded its highest sales since inception with a total of 1,074 units in June 2012.          She said Mazda would try to achieve the 2012 sales target through three similar variants, namely Mazda 2, Mazda CX-5 and BT-50.          Sole Agent PT Hino Motors Sales Indonesia (HMSI) set itself a sales target of 35,000 units in 2012. Sales and Promotion Director of HMSI Santiko Wardoyo recently announced that his company has sold 25,400 units in 2011 in Makassar, thereby grabbing 55.8 percent of the commercial vehicle market share.      (T.A014/INE/KR-BSR/F001) 23-07-2012 18:16:04