Indonesia car sales to halve due to coronavirus pandemic

Total car sales by Indonesia's automotive sector is expected to plunge 50% this year as domestic and export demand shrinks due to the coronavirus pandemic, the country's industry ministry said on Wednesday, citing industry association Gaikindo.

Last year, a total of 1.03 million cars were sold in the country, Southeast Asia's largest economy, while more than 843,000 units were exported in the form of completely knocked-down or completely built-up units, data from Gaikindo shows.

The industry ministry said in a statement that it has put forward Gaikindo's request for tax breaks to the finance ministry to help automakers weather the impact of the virus, which has infected 2,738 people in Indonesia and killed 221.

Globally, the virus has infected around 1.4 million and killed over 81,000, upending lives, businesses and disrupting supply chains as governments impose lockdowns to contain the spread. Travel curbs have hit demand across several sectors, including autos, as people stay at home.

For Indonesia, the auto sector is an important indicator of economic health as domestic car sales are often used to gauge private consumption. The sector contributes about 4% to the GDP excluding oil and gas, according to the industry ministry.

"Disruption in the automotive industry will affect the national economy as the industry has a significant contribution to GDP," Putu Juli Ardika, a director at the industry ministry, said in a statement.

Domestic car sales in January and February fell 2.4% on-year to 159,997, while exports fell 21.5% to 103,765.

Gaikindo had told the industry ministry it was facing problems procuring components from countries under lockdown, while some of its members have stopped production lines to protect workers from COVID-19, the respiratory disease caused by the novel coronavirus.

Indonesia's car market is dominated by Japanese brands, with Toyota and Daihatsu leading sales.