RI CAR SALES TO FALL ONE-THIRD THIS YEAR

Jakarta, Jan 20 (ANTARA) - Car sales in Indonesia will drop by almost one-third this year due to higher vehicle prices from a weakened rupiah and lower consumer spending amid the global economic slowdown, an economic consultant predicted here Tuesday.
Vivek Vaidya, Asia Pacific director of Automotive & Transportation for Frost & Sullivan consultants, said 2008 had been a record year for Indonesian vehicle sales making the country the second biggest automotive market in Southeast Asia after Thailand.
But he forecast sales would drop 29.2 percent from 603,774 units in 2008 to 427,278 units this year - a decline which began with last year's credit crunch.
"In the fourth quarter of 2008 there was panic in the automotive industry and that's going to impact on 2009 very badly," he said.
Vaidya said pick-up trucks would be hardest hit, declining 35.8 percent as companies defer vehicle purchases in the tough economic times.
"There is a tendency among companies to keep and maintain their current fleets of vehicles or sell them to minimize loss as manufacturers suffer from a decline in exports," he said.
Beyond the current downturn, however, Indonesia would be well positioned to take advantage of growing demand in Brazil, Russia, India and China in coming years, as well as domestic demand for cheaper cars, Vaidya said.
He predicted Asia would be the largest manufacturer of low cost cars by 2020, adding that Indonesia must take advantage of this growth area by strengthening its auto components sector and implementing policies to encourage growth in coming years.