Japan Automakers Cling to Indonesia Targets as Sales Slump  

TEMPO.CO, Jakarta- Japanese automakers are sticking to their targets in Indonesia in defiance of the longest sales decline in six years, resorting to steep discounts to entice tight-spending consumers into showrooms that remain stubbornly empty.

Honda Motor Co Ltd, Nissan Motor Co Ltd and Mazda Motor Corp aim to sell more cars this year than last, though overall sales to distributors have fallen each month since September and are down 18 percent in 2015.

"The decline is pretty drastic," said dealership salesman Jonatan, whose monthly average sales of Toyota Motor Corp cars was four versus eight last year. "We certainly have to work extra hard to sell cars these days."

Auto sales are a key indicator of consumption in Indonesia, where the economy is growing at its slowest since 2009, and where 7 percent inflation is eroding purchasing power. Consumers are consequently reserving more money for primary needs, the central bank said last month.

In response, automotive industry association Gaikindo in June lowered its sales forecast for this year to a range of 1 million to 1.1 million vehicles from 1.2 million.

"We are struggling with the market slowdown," said PT Honda Prospect Motor director Jonfis Fandy.

The firm has been trying to boost sales since early in the year via promotions usually reserved for Indonesia's annual automotive exhibition in August, to meet Honda's target sales increase of 10 percent.

Promotions include discounts on down payments, low-interest loans, and extending instalment periods to seven years from around four. Honda has sold 1.4 percent more cars as of end-May.

At Mazda, which aims to sell 9 percent more cars, one customer said he was offered 11 percent off a 450 million rupiah ($33,860.05) sports utility vehicle. But the mid-30s communication manager still delayed purchase for six months as economic conditions made him worry about finances.

Astrid Ariani Wijaya, senior marketing manager at PT Mazda Motor Indonesia - for whom year-to-date sales figures are unavailable - said the slowdown is affecting all industries, not just auto.

"What we are doing is maintaining advertising consistency in mass media," she said. "Discounts would depend on the model, and each dealer has different stocks."

REUTERS