Indonesian new car sales could revisit record levels this year - association
JAKARTA (Thomson Financial) - A consistent rise in new car sales during the first six months of this year despite a hike in fuel prices has raised hopes that full year sales could revisit record levels, an industry official said on Monday. Annual new car sales hit an all-time high of 534,000 in 2005, before tumbling to 318,904 in 2006 after the government hiked fuel prices by an average of 126 percent in the last quarter of 2005. "It is possible to revisit the record but I prefer to use the old estimate of 520,000 units for this year," Bambang Trisulo, chairman of the Indonesian Automotive Industry Association (Gaikindo), told Thomson Financial. Nationwide new car sales in the first half of the year surged 48 percent from a year ago to 292,589 units, led by the Toyota brand. In June alone new car sales reached 54,631 units -- the biggest ever monthly sales figure, Trisulo said. He does not think the 30 percent fuel price hike in May is going to have a significant impact on car demand. "As long as the economy can grow by at least 2.5 percent, a 30 percent fuel price hike should not have a big impact," he said. Trisulo said his main concern was now the rising global oil price as well as food prices, which could have a significant impact on domestic interest rate policy. Earlier this month Bank Indonesia raised its key interest rate by 25 basis points for the third straight month to 8.75 percent, after inflation accelerated to 11.03 percent in June. The central bank has, however, said inflation may start easing this month.
