Gaikindo: Excessive Supply Causes Tighter Competition

TEMPO.CO, Jakarta - Sudirman Maman Rusdi, Chairman of the Indonesian Automotive Industries Association (Gaikindo), said that the competition in the automotive sector will become even tighter because a number of car producers continue to increase their production capacity while there are no significant increases in demands. "This caused excessive supplies that in turn will increase the competition between carmakers," he said yesterday.

Sudirman said that five largest car manufacturers had just finished expanding their production plants this year, increasing their production capacity from 1,399 million cars to 1,998 million cars. On the other hand, car sales continue to drop from 10.2 percent in 2013 to 1.6 percent in 2014. Nevertheless, Sudirman asserted that the condition has a positive impact towards consumers, giving them more cars to choose from.

Gaikindo recorded that car sales from January 2014 to July 2014 had reached 733,716 cars, 2,7 percent higher compared to the same period last year. At the same time, the number of exports in the form of Completely Built Up (CBU) and Completely Knocked Down (CKD) units had reached 105,251 and 63,750 units, respectively.

Based on the data, car manufacturers have agreed to set a sales target of 1.25 million units until the end of the year. One of the factors that is predicted to affect car sales is the limitation of subsidized fuel.

Deputy CEO of Astra Toyota Motor Suparno Djasmin, said that the policy will certainly affect car sales for the next three months. "Sales will drop as consumers need to adapt to the situation. It will mostly be felt by first-time buyers. As for consumers purchasing their second or third car, they will not be affected because they are capable of purchasing non-subsidized fuel," Suparno said.

FERY FIRMANSYAH