Auto sales in Indonesia to grow slower in 2012, analysts predict image

Indonesia’s car and motorcycle sales grew at a slower pace in 2011 and analysts say growth is expected to slow further amid planned fuel subsidy curbs and higher loan interest costs.

Car sales reached a record level of 894,180 in 2011, up 16.9 percent compared to 2010. However, growth in 2010 was 57.3 percent. At the same time, motorcycle sales rose 7.3 percent in 2011 compared with 26 percent a year earlier, according to data from the automotive manufacturers’ association and the motorcycle industry association.

Slower growth in southeast Asia’s largest economy reflects factors specific to the industry and will not necessarily translate into slower consumption growth, according to OCBC Bank analyst Gundy Cahyadi. “It is very likely to slow in 2012, especially since 2011 is still a high-base year but we should note that this may not necessarily mean that domestic demand growth is on a decline. Other factors such as production capacity may play a part as well,” Cahyadi was quoted as saying by Reuters.

Toyota Motor Corporation was Indonesia’s top-selling automaker in 2011, with 310,674 cars, up 10.7 percent from 2010. Honda sales dropped 26 percent to 45,416 cars. Automotive sales were affected in the last three months of 2011 as floods hurt regional production in Thailand.