Impact Of Emergency PPKM For Automotive Industry, Gaikindo: Sales Will Be Under Pressure Again

Illustration. (Photo: Doc. Antara)

JAKARTA - Chairman I of the Association of Indonesian Automotive Industries (Gaikindo) Jongkie Sugiarto said the policy for the Java-Bali Emergency Restrictions on Community Activities (PPKM), which will take place on July 3-20, will have a distinct impact on the automotive sector, especially on the sales and production side.

"Of course there will be an impact on automotive sales and production, as well as its components. However, public health is above all else," Jongkie said as quoted by Antara, Monday, July 5.

Although he did not specify what kind of impact it could have, Jongkie said that the actors in the automotive sector would continue to provide support for the government's policy.

"We will comply with the Emergency PPKM, all members are asked to participate in implementing it," he said.

On the other hand, academic as well as automotive observer from the Bandung Institute of Technology (ITB) Dr. Yannes Martinus Pasaribu said the Emergency PPKM has the potential to put even more pressure on all business sectors in the Java-Bali area, including the automotive sector if it turns out that it has to be extended for more than one month, because community activities in the automotive captive market area are again tightened.

"This will make people enter into uncertainty and doubt as well as a paranoid psychological atmosphere. Restrictions on people's activities will also limit their consumption activities and the entire economic chain that correlates with it," Yannes said.

"As a result, the upward trend in automotive sales which has improved in the second quarter has the potential to experience even deeper pressure and the potential to prolong the economic recession. There is no certainty whether after 2 weeks of emergency PPKM the spread of COVID-19 will subside," he added.

Looking back, sales of new cars in Indonesia in May 2021 were recorded at 54,815 units, a decrease of 30.5 percent compared to sales in April 2021 which were 78,908 units.

Launching Gaikindo data, factory sales to dealers (whole sales) in May 2021 remained much higher than last year's May sales of 3,551 units. It can be understood that in 2020 Indonesia will implement a tightening of outdoor activities following the entry of the COVID-19 pandemic.

Although it fell by 30.5 percent, car sales in May 2021 were still better than in January and February 2021, which were 52,909 units and 49,202 units, respectively.