Car
2001 2002 2003 2004 2005Production 200,901 n.a. 201,771 n.a. 226,068 n.a. 312,865 n.a. 364,319 n.a.
Market share(%) Production n.a n.a 0.4 (%) n.a 0.8 (%) n.a n.a
Until 2nd quarter of year 2005, Indonesia automotive market was quite promising, shown by increase in car sales during year 2001-2005, with average growth of 82.4% from 284,308 units in year 2001 to 518,474 units in year 2005. Meanwhile, sales growth during year 2004-2005 was 11.8% from 463.903 units to 518.474 units. Growth of sales volume during 2004-2005 was negative 72,867 or 68.9% compared to sales volume during 2003-2004 which was 127.258 units. In year 2006, Indonesia car sales volume was predicted to experience contraction as much as 32.5-42.1%. In other words, sales volume decreased to the level of 300,000 - 350,000 units 1). In the first semester of 2006, car sales volume experienced asignificant drop which was as big as 71.1% or 149,600 units.
Fig-1:Market Vs interest rate
Fig-2: Market Vs Fuel Price
People's low buying power due to dramatic increase in fuel price, relatively small government expenditure for investment and credit interest which is still considered high (around 16%)are factors that has made automotive its vigour. Fluctuation of interest rate will affect people's investment pattern and producers' ability in paying services. This can be seen from graph 1 which depicts relationship between market and interest rate.Automative m tends to gain power as interest rate declines, especially in the case of interest rate for consumption credit.
Graph 2 shows relation between market and fuel price. This graph shows that automotive market increased until mid 2005, but declined in the end of 2005. This was caused by government policy to increase fuel price dram This rendered in inflation jump and thus weaken people's buying power. Therefore it is expected that the government will create policies that will improve condition for business. Besides government, Bank Indonesia as hold monetary authorship may help the implementation of the policies by decreasing interest rate up to optimum level. This will give a positive impact to the market interest rate. Other positive signal is that there are some oppo for investment in public transportation.
Note: ¹ Kompas, 12 Agustus 2006
