Frost & Sullivan's Mobility team forecasts
Indonesia's vehicle sales to grow
4.6% in 2018, with commercial vehicles performing well
JAKARTA, Indonesia, Jan.
17, 2018 /PRNewswire/ -- The Indonesia automotive market
is expected to remain resilient in 2018. Vehicle sales are likely
to reach 1.125 million units at a growth rate of 4.6%. Among the
sectors, commercial vehicles are expected to be in high demand,
along with steady growth in LCGCs and MPV segments.
Mr. Vivek Vaidya, Senior Vice
President of Mobility at Frost & Sullivan says the long term
factors such as GDP growth rate, favorable demographics and low car
parc per thousand point towards a strong long term growth rate.
However, we need to focus on 2018 specific factors to understand
the dynamics.
He added, "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 fueled by demand in construction and
infrastructure segment."
He also added, "There is lot of pent up demand in 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."
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. In fact the cut in prime lending
rate by 0.5% which took place in 2017 is likely to have strong
impact in 2018. Lower lending rate would spur demand and automotive
sector would be benefited by this favorable fiscal incentive, he
added.
Only negative factors in 2018 are pressure to contain fiscal
deficit and likely changes in energy prices. Fiscal deficit still
stands at about 2.2% of GDP, which may put pressure on tax revenues
prompting stricter compliance and use of other means to boost tax
revenues.
2017 Review
Vehicle demand in Indonesia is
expected to grow by 1.2 per cent in 2017. The trends in passenger
cars and commercial vehicle were quite contrasting. Passenger cars
declined by 2.6% despite new model launches and high consumer
confidence, on the other hand commercial vehicles increased by
whopping 17.1% largely due to demand from construction and mining
segment.
Passenger vehicles market share by OEMs in 2017
Despite strong long term growth indicators like GDP growth rate
and strong demographics, passenger car sales declined. New exciting
launches like Mitsubishi Xpander, Toyota Innova facelift, Suzuki
Ertiga facelift didn't help either. Only LCGC segment turned out to
be a bright spot in the gloomy passenger vehicles market. LCGC
segment grew by 6.3%.
Mr. Vaidya commented that this shows that despite high consumer
confidence indicators and long term growth trends, customers are
being conservative and are buying value offerings. LCGC MPV models
also may be challenging the MPV segments due to attractive
pricing.
Commercial vehicles market share by OEMs in 2017
Mr. Vaidya observed that strong demand in commercial vehicles
was due to strong show in mining, manufacturing and construction
segment.
He added, "Mitsubishi and Hino gained from huge demand for
medium and heavy trucks. However, the slowing retail and consumer
sectors restrained demand for pick-ups and light trucks."
The Frost & Sullivan Mobility practice provides global
market intelligence, prescriptive research to execute market growth
opportunities, and tailor-made advisory services within the
personal and freight mobility market. To view current and upcoming
research, please visit
http://www.frost.com/c/10046/sublib/category-index.do?category=industry
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Phone: +65 6890 0926
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