Why Cars Over Rp 300 Million Attract More Buyers Than LCGCs

Looking at the facts above, an anomaly can be seen where cars above Rp 300 million are more in demand than LCGCs.

“This happens because the upper-middle segment is relatively more resistant to inflationary and interest rate pressures,” said Josua Pardede, Chief Economist of Permata Bank to KatadataOTO some time ago.

According to Josua, the upper-middle class also has more flexible access to financing. This makes it easier for them when they want to purchase a vehicle.

Then, it is driven by the trend of aspirational buying amidst the proliferation of new models. Such as in the hybrid and electric car segments in the Rp 300 million price range.

Photo : KatadataOTO

“Conversely, the lower segment is very sensitive to price increases and installment costs. So they hold off on purchases or switch to used cars,” he said.

Indeed, the weakening economic condition of the lower-middle class undeniably has a significant impact on the automotive sector.

Coupled with a wave of layoffs (PHK). This makes the lower class prefer to save their money.

They also invest their money in gold, rather than buying high-risk goods or assets.

“That makes the price-sensitive segment very fragile, including new LCGCs and Low MPVs,” Josua asserted.

Psychological Price Point

On the other hand, the price range of Rp 300 million to Rp 400 million is considered an attractive psychological price point. Especially for manufacturers from China.

Many manufacturers from China offer cars in that price range. Such as the Chery Tiggo Cross CSH, which is marketed at Rp 319 million.

Next, for the electric car segment, there is the BYD Atto 3. This Electric Vehicle (EV) is sold starting from Rp 390 million and Rp 520 million.

So it's no wonder that cars with a price tag of Rp 300 million have been quite popular lately in the country.