Used Car Business Under Pressure Due To COVID-19

JAKARTA - The outbreak of the COVID-19 outbreak has had an impact on the Indonesian car industry. The month of Ramadan is usually a momentum to increase car sales, especially for those who are looking for a vehicle to use during the Eid homecoming.

But now, the sales of new and used cars have decreased quite drastically. Plus the government's ban on going home to reduce the spread of COVID-19.

Based on internal OLX data, it shows a decrease in the number of requests (searches) for cars on the buying and selling platform by around 40 percent, since the first week of Ramadan on April 23 to be precise. This figure is drastically reduced compared to sales data before the government announced the first case of a positive patient with COVID-19.

OLX Indonesia's Marketing Director Ichmeralda Rachman said, during the same period, the data also showed a decrease of around 30 percent in the number of car transaction listings on the OLX platform. He believes this is because there has been a change in the priority scale of the community in purchasing goods during the COVID-19 pandemic.

"With this economic uncertainty, we estimate that this condition will continue throughout the rest of the month of Ramadan 2020. This situation is different from last Ramadan 2019, where the number of requests continued to increase until the third week of Ramadan. In line with the number of requests, the number of listings in Ramadan this year. then it also experienced an increase and was relatively stable during the month of Ramadan 2019, "he said, through a written statement received by VOI, du Jakarta, Thursday, May 21.

Ichmeralda said, although there was a downward trend in the number of listings and the number of requests for car types, the type of MPV car from the Japanese car brand was still the car most sought after by OLX users.

"Toyota Avanza and Toyota Innova are still the two top car brands chosen by users, followed by Honda Jazz and Daihatsu Xenia. The preference for these car brands was consistent before and during the COVID-19 pandemic," he explained.

The stable sales of Avanza and Innovation cars, said Ichmeralda, were based on the fact that Indonesians generally have a large number of families and are accustomed to living communally (having a community) and prefer cars that have large capacity and are multipurpose.

Stable Car Selling Prices

Despite experiencing a decrease in the number of requests. The selling price of car brands on the OLX platform is quite stable and has not changed significantly.

At least for some types of vehicles, the selling price of cars has decreased by about 5 percent from the average offering on OLX. Likewise for used cars, the selling value is relatively stable at around Rp. 146 million, with the type of MPV vehicle still being the prima donna.

"This pandemic has hit the middle class a lot, so it is the middle class preferred type of family car that has experienced a significant drop in demand," he explained.

Significantly, car brands such as Toyota Avanza, Suzuki Ertiga and Daihatsu Xenia experienced a decline in demand of around 50-60 percent until the first week of Ramadan 2020. Likewise, the demand for luxury cars, such as the Toyota Fortuner, Toyota Alphard and Mitsubishi Pajero. Sport has only decreased by about 30 percent.

This downward trend also has an impact on the number of vehicle units owned by car dealers. "This data shows how in a pandemic situation, dealers are trying to reduce the addition of used cars to trade, given the decreasing purchasing power of the public and the various mobility restriction policies currently implemented by the government," he said.

However, he continued, the average good price offer from car dealers is fairly stable. Several units and types of cars are still being offered with a price range of Rp. 249 million and Rp. 121 million for used cars.

"This condition is understandable in the midst of the current pandemic situation. However, we are sure that as soon as the situation improves, the car industry in Indonesia, including the used car market, will also gradually recover and will again make a major contribution to the Indonesian economy," he said.