Indonesia Vehicles Market in 2015 dropped in double-digit hit by economic crisis. Ford announced to quite the market by the end of the 2016 for profit reasons. Toyota, market leader, goes ahead fast (and happy).
Economic Outlook
The Indonesian economy underperformed in 2015 due to prolonged delays in government spending, sluggish private investment and the impact of weak global markets on external sector growth.
Latest data confirm the unfavorable scenario at the close of last year: the manufacturing PMI remained in contractionary territory and exports contracted at a double-digit pace for the eighth consecutive month in December. While many economic challenges will continue this year, there is renewed hope that public investment and infrastructure spending will finally kick into higher gear and boost the economy.
The government continues in its push to remove bottlenecks and several large projects are set to begin. In fact, on 21 January, President Joko Widodo inaugurated construction on the country’s first bullet train line, a key project in the government’s broader plan to overhaul infrastructure and build up investor confidence.
Market Outlook
In the 2015 a combination of global and domestic factors slowed down Indonesia’s economy and caused the rupiah’s exchange rate to plunge to a 17-year low against the dollar. This has had a detrimental impact on the people’s spending power, affecting consumption in almost all business sectors, including the automotive industry.
According to data released by the GAIKINDO, the Indonesian Associations of Car Manufacturers, in the full year 2015 the total new Vehicles sold in Indonesia (cars, LCVs, HCVs and Bus) have been 1.031.430 down 13.7% from the previous year. December, with its fall of 8.6% was the 16th Y.o.Y. falling months in a series.
As far as the 2016, while Gaikindo has targeted a modest 5 per cent growth from last year’s sales figure, market consulting firm Frost and Sullivan predicts a 4.3 per cent decline in car sales in 2016 due to a depreciated local currency, weak commodity prices and dampened purchasing power. Sales could even be worse should the government fail to reach the 5.3 per cent economic growth it has targeted for 2016.
Following a similar decision taken last year by Subaru, Ford Motor announced last week that it has decided to close all operations in all areas of business in Indonesia by the end of 2016 amid unprofitable business. Indeed, we believe that Ford line up actually is not competitive for a market dominated by low cost large MPVs and low profit city cars.
Tables with sales figures
In the tables below we report sales for all Brands, top 10 Manufacturers Group and top 10 Models
