Economy & Industry News

Pandemic Forces Carmakers to “Park” Their Cars at Dealers

JAKARTA— Car manufacturers in Indonesia have been observed to increase their unit stock at dealerships rather than deliver them to customers in March during the virus pandemic. As usual, they hoped to see sales increase at the light of Idul Fitri (Lebaran) around May 24, 2020.

The wholesales figure of all brands in March according to data from the Association of Indonesian Automotive Industries (GAIKINDO) fell 3.5 percent. In March the number of wholesales76,800 units, while in February 79,601 units.

The wholesales movement in March is very different from retail (dealer sales to consumers). The retail figure fell by around 22 percent, in March it was 60,447 units while in February it was 77,847 units.

The difference between wholesale and retail in March indicates that the supply of units to dealers remains large. The problem is, dealers are difficult to sell to consumers. This condition makes the dealer have a normal unit stock or even bigger.

Astra Daihatsu Motor (ADM) explained that their car production did not sag in March because its performance was still referring to plans to meet the increasing needs ahead of the Idul Fitri holiday in May. The increase in car demand at that moment was said to reach 15 percent. “The production was planned before knowing the plague outbreak entered Indonesia. There are still plans to prepare before Lebaran, “said ADM Marketing Director Amelia Tjandra Tuesday, April 21, 2020.

“The factory has been arranged in such a way as to suppliers, working people, and others. Long and many parties involved. If you make the cake by yourself it’s easier to arrange it,” she said.

Daihatsu wholesales in March increased 13 percent to 18,162 units from February 15,778 units. However Daihatsu retail in March recorded 10,946 units, down 19 percent from February 13,658 units. In addition to Daihatsu, the wholesales that recorded an increase during March were Honda. Business Innovation and Sales & Marketing Director of Honda Prospect Motor (HPM) Yusak Billy explained the increase was made because it was adjusting unit stock at the dealer.

In March, Honda wholesales rose to 12,068 units, while in February it was 11,373 units. “The wholesales follow the existing stock conditions at the dealership. So the ups and downs depend on stock conditions too,” Billy said.

Overall GAIKINDO recorded an increase in the number of car production in Indonesia in March amounted to 52,393 units, while in February it was 50,263 units. Daihatsu, Honda, Toyota, Suzuki, BMW, Isuzu and Mercedes-Benz have temporarily closed production facilities in Indonesia in April. GAIKINDO has predicted that car and retail production will decline in April, May, June and July.

GAIKINDO projects that improvements to the automotive industry will come in August. Even so GAIKINDO only targets national car sales this year to be only 600 thousand units, down from the initial target of 1 million units this year. (*)