ASEAN KEY DESTINATIONS
Indonesia to overtake Thailand in autos
Johnny Darmawan, president director of Toyota Astra Motor, told attendants at Indonesia’s largest motor show that the automotive industry was doing well and could become the biggest market in Southeast Asia “soon.”
“With a huge population of 240 million people coupled with a rising middle class with a per capita income exceeding $3,000, we believe Indonesia could be the biggest automotive industry and market in the region,” he said.
Johnny said Indonesia’s automotive industry recorded a strong performance over the past 18 months.
Hatta Rajasa, the coordinating minister for the economy, said Indonesia could overtake Thailand as the region’s automotive hub. “We have to be optimistic that our automotive industry can be the biggest in the region, beating Thailand,” he said.
Indonesia produced 650,000 cars last year and 384,000 cars in the first half of 2011, Johnny said, citing data from the Indonesia Car Industry Association (Gaikindo). It sold 764,000 cars last year.
In Southeast Asia, Indonesia is home to 31 percent of production, just behind Thailand’s 32 percent. Globally, Indonesia’s output represents just 1 percent of the industry.
Its surging middle class and low borrowing costs have boosted consumer spending on new cars and motorcycles. Typically, Indonesian consumers finance 80 percent of their car and motorcycle purchases with bank loans.
Bank Indonesia, which forecast the economy to grow by as much as 6.8 percent this year, has kept its key interest rate — the benchmark for lending — at 6.75 percent, providing room for automotive financiers to give a relatively affordable rate.
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