JAKARTA: The Indonesia automotive market is expected to remain resilient in 2018. Vehicle sales are likely to reach 1.125 million units at a growth rate of 4.6%. Among the sectors, commercial vehicles are expected to be in high demand, along with steady growth in LCGCs and MPV segments. Mr. Vivek Vaidya, Senior Vice President of Mobility at Frost & Sullivan says the long term factors such as GDP growth rate, favorable demographics and low car parc per thousand point towards a strong long term growth rate. However, we need to focus on 2018 specific factors to understand the dynamics. He added, “The upcoming car launches with new models, facelifts and variants especially for some key market models in MPV segments are expected to drive the sales. The Commercial Vehicle market will still continue to be fueled by demand in construction and infrastructure segment.” He also added, “There is lot of pent up demand in commercial vehicles segment. Due to production shortage the entire demand in 2017 could not be fulfilled, this demand is going to spill over to 2018 boosting the commercial vehicles sales, further.”
The consumer sentiment is expected to remain positive in 2018 largely due to positive economic outlook, stable exchange rate and reduction in prime lending rate. In fact the cut in prime lending rate by 0.5% which took place in 2017 is likely to have strong impact in 2018.