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Car market to reach 930,000 units this year

04 January 2012

Car market to reach 930,000 units this year


JAKARTA: The Association of Indonesia Automotive Industries, or Gaikindo, estimated domestic car market will grow 3%-5% in 2012 compared to last year.
Based on the data from Gaikindo until November 2011, the total national car market exceeded 813,856 units, and predicted to grow further to reach 870,000 units throughout last year.
“Gaikindo is eyeing 3%-5% growth in car market or 910,000—930,000 units next year,” Chairman of Gaikindo Sudirman M. Rusdi said over the weekend.
Furthermore, he added, the 2012 growth target of national car market is conservative one. Gaikindo, he adedd, could have been targeting a larger market growth such as 10%, to 960,000 units.
However, the association is still not confidence to set larger growth since there are some factors to be considered. For instance, the impact of European crisis toward the liquidity, since 75% of the motorcycle purchases are from banks and other financial institutions.
On separate occasion, PT Mazda Motor Indonesia President Director Keizo Okue estimated the market of sport utility vehicles (SUV) and multi purposes vehicles (MPV) will grow this year.
According to Okue, it’s because many new models are popping out while both segments reaches its popularity and people who already have B-car segment tends to switch to premium vehicle such as SUV.
Although both segments will grow, he sees that it will not dilute B-car market since the market in this segment is predicted to remain stable.
Based on the Global Auto Report released by Scotia Economics Research Institution, the 5% growth in 2011 is moderate and even declined compared to 12% in 2010.
“We expect 4% growth in 2012 although it may reverse if the eurozone debt crisis remains unstable,” Carlos Gomez, Scotia Senior Economist said in that report last December.
The report added Japan’s market that recovered after the tsunami disaster will prompt global market growth. The market that dropped almost 20% in 2011, the lowest level since 1987, is estimated to grow double digit in 2012.
The growing demand in developing countries will also support global market growth as triggered by strong employment growth and interest rates decline.
7% growth
Motor vehicle sales in developing countries will grow 7% to 31 million units this year and for the first time the market will exceed the market of developed countries in Western Europe, North America, and Japan. 
A decade ago, the markets of developing countries recorded less than 20% of the global market, Global Auto reported.
Besides Japan and developed countries, US market will also grow to 13.5 million units this year, which is the highest level since 2007 boosted by the growing demand from household and corporate consumers who replace their old vehicle.
Meanwhile, the West European market will be the weakest in global market throughout this year. The sales may decline 5% to 12.2 million units as the lowest level in the last two decades.
The sales volume in Germany is predicted to relatively stable at 3.2 million units. However, the market outside Germany may drop to less than 9 million units.
Such figure is going to be the lowest since 1995, driven by weak economic activity and savings plan that is recently introduced in the South European region. (t06/ags)

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