Following the news that car sales in Indonesia rose by 9.9% month-on-month in November 2020;

Bakar Sadik Agwan, Senior Automotive Consulting Analyst at GlobalData, a leading data and analytics company, offers his view:

“Within the given scenario of troubled economic environment and high incidence of COVID-19 cases, the growth is a major positive for Indonesia. With slowly picking up demand for new vehicles, the year-on-year sales scenario has been improving. The December Y-o-Y sales now stands 41% lower than the same month in 2019, as compared 95.8% Y-o-Y decline in May 2020. The pent-up demand for new vehicles and slowly picking up economic activities in the country are the key factors positively supporting the new vehicle sales. Furthermore, measures by government to increase public consumption and boost economy such as the National Economic Recovery (PEN) Program have also positively impacted the car sales.

“However, Indonesia automotive sales are highly likely to remain dwindled due to increasing COVID-19 cases and declining consumer spending. According to the Asian Development Bank and IMF, economic recovery can only be achieved in 2021. These factors indicate slow recovery of the automotive sector in the country.

“December will be a key month. However, even with attractive discounts and year-end promotions by OEMs, the 2020 full-year retail sales are expected to remain far below the Association of Indonesian Automotive Manufacturers’ (Gaikindo) revised sales projection of 600,000 announced earlier this year.”