Indonesian Car Market, Days before Pressure

Save as much as you can before the rainy day

Honda FCX Clarity one of the brand new hybrid carsThat might be a match sentence for Indonesian Automaker. Forget about the recall crisis, Indonesian car market is not affected by that and (possibly) not sensitive enough with the recall issues, but the distributors need to boost sales as much as they can. Why so? Because the hard days are yet to come.

The causes are:

  1. Progressive Tax Plan
  2. The progressive tax means higher tax will applied for the second car. If the owner buy his second car, the car will have higher tax than the first one, if he buy the third, it has higher tax than the second one and so forth. Conclusion is to prohibit Indonesian to have multiple cars. Good news for crowded Jakarta street, bad news for Automaker. It’s still on debate to be applied in Jakarta, which is the biggest market for automobile in Indonesia.

  3. No Subsidized Gas for New Car
  4. Most (maybe ‘nearly all’) car in Indonesia used the subsidized Octane 88 gasoline. It’s a hidden feature of tax rebate I know, but Indonesia is not an oil land anymore (I will discuss about it more in the next post). Some policy plan has been discussed regarding this problem, and the last one is the car which produced in 2000 and thereafter are not allowed to consume the subsidized gas. It’s still on debate, but the latest news said that Pertamina, the one and only oil company allowed to sell the subsidized gas is booked Rp 456 billion (about US$ 45.6 Million) loss because of the gas. If the rule really applied, good news for Pertamina, bad news for Automaker, as the demand of the new car estimated to be decreased because of this.

  5. Increasing Steel Price
  6. The steel price is reported to be doubled from last year, because of steelmaker increasing operarional cost. This will create a pressure to the price of the new car as they need more pocket to buy the main ingredient. Okay they will charge more to the customer, but remember the demand is contradictionary to the price. Bad news for Automaker bad news for Consumer too.

The last one is slow but sure will make the car price more expensive, the first two? Still on the debate but when those two are really applied, the market will be totally changed. The Automaker must boost car sales as much as they can before running out of time.


Anton Hermansyah

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