JAKARTA - The Association of Indonesian Automotive Industries (Gaikindo) revealed that the decline in domestic car sales in the last two years was triggered by an increase in global interest rates, a spike in Non Performing Loans (NPL) to tightening credit payments from finance companies.

"One of the trigger factors for the stagnation of the car market is that the price of new cars is not affordable by people's per capita income. The gap between household income and new car prices is getting wider," said General Secretary of Gaikindo Kukuh Kumara, written Thursday, July 11.

Kukuh said domestic car sales as of May 2024 fell 21 percent to 334,000 units.

As a result, Gaikindo may revise the 2024 car sales target of 1.1 million units.

"We are likely to revise the target by considering a number of market suppression factors," he said.

With the sluggish sales of the car, Kukuh emphasized, the national economic growth target must be increased to 6-7 percent per year.

This aims to get Indonesia out of the trap of 1 million units of the domestic car market.

So, he said, per capita income could increase by 5-6 percent per year.

For your information, the domestic car sales figure is below the target of 1.05 million units throughout 2023.

Referring to Gaikindo's latest data, car sales on a whole sales basis reached 1 million (1,005,802) units throughout 2023, down 4 percent compared to the achievement throughout 2022 of 1.04 million (1,048,040) units.

Meanwhile, retail sales throughout 2023 reached 998,059 units, down 1.5 percent compared to 2022 which reached 1.01 million (1,013,582) units.

The English, Chinese, Japanese, Arabic, and French versions are automatically generated by the AI. So there may still be inaccuracies in translating, please always see Indonesian as our main language. (system supported by DigitalSiber.id)