Economy & Industry News

The National Automotive Industry Hopes to Recover in the Second Half of 2020

JAKARTA— The growth of the domestic car market in the first quarter of 2020 showed weakening as a result of an outbreak of the virus that forced people to take shelter indoors. The Association of Indonesia Automotive Industries (GAIKINDO) noticed that car sales (both retail and wholesale) fell compared to that in 2019.

During January-March 2020, domestic automotive agents of brand holder (APM) noticed retail sales of 219,361 units. This figure is down 15.6 percent from the same period of the previous year (259,963 units).

While in terms of factory sales to dealers, there was a decrease of 6.9 percent on an annual basis (year-on-year), from 254,332 units in 2019 to 236,797 units. GAIKINDO’s Chairperson Yohannes Nangoi said that this condition had been predicted beforehand. He said, the pace of the national automotive industry will continue to stagnate at least until the second half of 2020.

“We expect the automotive market to fall by 40 percent from the achievement of 2019. This may continue for the next few months until July 2020,” he said on 16 April 2020. “Based on current projections, the market may recover in the period June-July 2020, semester two. Then it feels like closing 600,000 units until the end of the year.”

Regarding the strategy and efforts to deal with the market recovery in the six months, Nangoi still could not say for sure. Nor can he talk about the GIIAS 2020 exhibition in August this year. “The main thing is jointly working to stop the spread of the disease and overcome it. If all disciplinary parties adhere to the existing protocols and regulations, this pandemic might be resolved together in May or June 2020, “said General Secretary GAIKINDO Kukuh Kumara.

When the scenario can be implemented (the pandemic is completed in May-June 2020), people’s purchasing power will follow so that the recovery period can be fast. (*)