Indonesia's Automotive Industry Expected to Improve in Q4 2024

2024/05/07
General News, Market Data
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Malaysia
Indonesia
PT Mirae Asset Sekuritas Indonesia anticipates an improvement in the performance of Indonesia's automotive industry in the fourth quarter of 2024, following potential improvements in the purchasing power of the population and a decrease in the Bank Indonesia (BI) benchmark interest rate. Analyst Christopher Rusli stated that the current purchasing power of the people is suppressed due to interest rate hikes, leading to a year-on-year decline in new car sales of more than 23% to approximately 215,000 vehicles in the first quarter of 2024. If the Federal Reserve in the United States lowers interest rates in September 2024, and BI follows with two rate cuts in the fourth quarter while the rupiah exchange rate remains stable, it is optimistic that the purchasing power of the people and car sales will improve at the end of the year. However, the overall performance for the year is not expected to surpass last year's figures. On the other hand, despite the suppression in new car sales, the used car industry continues to grow. Analyst Abyan Habib Yuntoharjo of Mirae Asset mentioned that automotive financing figures continue to grow steadily by more than 10%, even though new car sales, particularly passenger cars, declined in the first quarter of 2024. Jany Candra, CEO of Autopedia Sukses Lestari Tbk, stated that the company currently has a more comprehensive ecosystem for buying and selling used cars compared to competitors, projecting continued growth in performance with revenue and net profit growth exceeding double digits. In the first quarter of 2024, the company's net profit surged 600% year-on-year to IDR 16.95 billion, compared to IDR 2.24 billion in the same period the previous year.
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