Jakarta and West Java contributes 34% of new vehicles sales in Indonesia

Jakarta and West Java contributes 34% of new vehicles sales in Indonesia

 

From January 2024 to June 2024 from 431,907 new vehicles sales (4wheelers and more) that registered in Indonesia, Jakarta contributes 83,436 units or 19,32% followed by West Java with 64,500 units sold (14,9%). Means that Jakarta and West Java alone already contributes to 34,2% of national sales.

Why Jakarta and West Java is very prominent? Needless to say, everyone already know if Jakarta and West Java has bigger dealer network compare to any other city in Indonesia. Naturally, OEM/ NSC will always build its dealer network in those 2 provinces, first before go to other cities and dealership is always important to generate volume sales, as Indonesian still prefer to buy car directly to dealer that’s why online channel now still in leads generator phase in automotive business. Everyone already knows as well if infrastructure in Jakarta and West Java more advance including for EV matter. Most of big automotive event also held in Jakarta and West Java and so on.

I just want to add from other perspective about the reason why Jakarta and West Java has bigger contribution, it’s about entry level segment as entry level is very important. As entry level customer has potentially to growth up to buy other car or increases its level from entry level into higher level. Entry level customer is like great seed to boost volume sales in the future and West Java and Jakarta has bigger entry level customer.  For YTD June 2024, there is no less than 11K entry level customer in Jakarta and for West Java is even more, no less than 15K customer which is great capital to be optimized into loyal customer.

So seems Jakarta and West Java still leads new vehicles sales contributor table in the future.

Muhammad Luthfi

Product Planning at PT. JVCKENWOOD Indonesia

3mo

Thank you for sharing a very insightful information sir. I think this is aligned with one of the factor of significant wholesales decrease in 2024. Increasing of online loan customers in Indonesia, especially in West Java and Jakarta, lead to decrease of middle income consumers purchasing power which hinders sales growth in automobile. This the main problem IMHO. Even if the interest rate is low, as long as the online loans market size still big, no hope for rebound of automobile sales. The root cause is below: 1. Online loan is more attractive for middle income consumers due to easy application. 2. Credit limit of online loan is suitable for consumptive purchases. 3. On the other side the rate applied will significantly reduce purchasing power of its customers. 4. Above leads to high NPL which impacting credit score. Number 1 and 2 lead consumers purchase preferences from buying an automobile to an impulsive buying behavior. Number 3 and 4 cause inability to financially recover or marks as high risk consumers for automobile finance company.

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