The Indonesian automobile industry is anticipated to grow 15% in 2008 due to low interest rates on auto loans and launch of fuel-efficient vehicles.
According to the country’s Association of Indonesian Automotive Industries (Gaikindo), despite 30% hike in subsidized fuel prices, the automobile sales in Indonesia is expected to rise by 15% to over 500,000 Units in current year (2008), as reported by REUTERS.
The association also disclosed that the vehicle sales increased very rapidly to 434,449 Units last year (2007). The growth rate was nearly 27% higher as compared to the year preceded it. Hence, some industry experts have predicted that around 500,000-550,000 vehicles are expected to sell this year.
Bambang Trisulo, Chairman, Gaikindo, said that the Indonesian automobile industry will continue to see rise in vehicle sales though fuel prices have inflated as long as the central bank kept BIPG (Bank Indonesia gradually low down its benchmark interest rate), the interest rate at 8.5%, as reported by REUTERS.
Moreover, the low interest rates on vehicle loans are expected to spur growth in the Indonesian vehicle market. Affordable interest rates on vehicle loans are enabling people to expense on buying new vehicles in the country. In addition, strong economic growth in Indonesia will also boost the automobile industry, as consumer-purchasing capacity would remain high. Further, Indonesia has emerged as the fastest growing economy in the eastern Asia, therefore rapid development will also support the sale in automobile industry of the country in coming years.
Another main reason for high growth in the Indonesian automobile market would be launch of more fuel-efficient cars. Rising fuel prices will force manufacturers to launch fuel-efficient vehicles with advanced technology to remain in the cut-throat competition. Further, burgeoning competition among auto manufacturers will lead to reduction in prices that will boost the vehicle sales in the country.
According to a Research Analyst at RNCOS, “The sale in the Indonesian automobile industry is expected to rise in future. But auto manufacturers need to offer more advanced technologies like entertainment system and navigation along with fuel saving technology as an option to sustain growth in the industry. This will help in attracting more sophisticated consumers looking for high technology.”
Related Market Research Reports:
Czech Republic Automobile Sector
Brazil Automobile Industry till 2010
Booming Russian Automobile Sector
