New vehicle sales in Indonesia continued to plunge in June 2020, by almost 79% to 12,623 units from already weak year earlier sales of 59,539 units, according to member wholesale data compiled by industry association Gaikindo, as the economic impact of the global COVID19 pandemic on the country’s economy continued to grow.
Compared with the previous month, which was expected to be the low point of the current crisis, sales in June were up by 255% as the government began to ease lockdown measures put in place in March to slow the spread of the coronavirus.
But, with infections nationwide still on the rise, the government had to balance the public health concerns with the economic needs of the country including depressed consumer and business sentiment.
Bank Indonesia cut its benchmark interest rate by 25 basis points to 4% this month to help stimulate growth, the fourth such rate cut this year, following the release of government estimates that GDP shrank by 3.8% year on year in the second quarter with a further contraction expected in the third quarter.
Cumulative first half sales were down by almost 46% to 260,933 units, compared with 481,577 in the same period of last year, with first quarter sales dropping by just under 7% to 236,891 units and second quarter sales plunging by almost 90% to 24,042.
Sales of passenger vehicles fell by over 46% to 199,140 units in the six month period while commercial vehicle sales were down by 44% to 61,793 units.
Manufacturers including Toyota, Daihatsu, Suzuki, Mitsubishi and Honda were forced to suspend local production for long periods in the second quarter to control inventory as domestic retail demand and exports plunged.
Nissan earlier announced the closure of its second plant in the country, choosing instead to rely on imports and on product rebranding with Alliance partner Mitsubishi Motors.
Toyota reported a 47% decline in wholesale volume to 81,816 units year to date followed by Daihatsu with a 42.8% drop to 49,774 units, Honda 38,769 (-34.4%); Suzuki 28,786 (-38.2%) and Mitsubishi 27,932 (-56.8%).
Meanwhile, PT Honda Prospect Motor this week announced the recall of 85,000 vehicles due to suspected faulty fuel pumps.