Affordable Car Sales Decline, Upper-Middle Segment Profits

KatadataOTO – The automotive industry continues to face challenges in mid-2025. Referring to data from Gaikindo (Association of Indonesian Automotive Industries), retail sales figures for cars as of June 2025 year-on-year fell by 12.3 percent.

Overall, from January to June 2025, retail car sales stood at 390,467 units, still far from Gaikindo's minimum target of around 750 thousand units.

Then, one thing of concern is the decline in sales of low-cost cars, coinciding with the rise of the medium-high MPV (Multi Purpose Vehicle) and SUV (Sport Utility Vehicle) segments.

In more detail, sales in the low-cost car segment, including LCGC (Low Cost Green Car), fell by 12 percent in the first half of 2025 compared to the same period last year.

Photo : KatadataOTO

Specifically for LCGCs, the sales decline was 3.7 percent in the first half of 2025.

Meanwhile, other segments, including medium-high MPVs and SUVs, medium pickups, and trucks, saw a 27 percent increase.

In response, the government recently decided to extend the LCGC incentive until 2031 to boost sales.

As one of the LCGC manufacturers in Indonesia, Daihatsu hopes that in the second half of 2025, car sales can increase with government assistance.

“The most important thing is leasing. Because we are still dominated by credit in the Indonesian market, (the hope is) that the NPL (Non-Performing Loan) can also become healthier,” said Sri Agung Handayani, Marketing and Corporate Communication Director of PT ADM (Astra Daihatsu Motor) in Jakarta, on Thursday (17/07).

She emphasized that car sales this year did experience a decline in certain periods, such as January, when consumers postponed purchases while waiting for the vehicle tax policy.

The significant decline in LCGC sales, according to her, is the reason Daihatsu has started to change its sales strategy and try to reach more types of consumers.

Photo : Courtesy

“We are still focused on first-car buyers; the regions are the same, still entering urban but also remote and rural areas,” said Agung.

She emphasized that Daihatsu appreciates the government's decision to re-implement the LCGC incentive to help manufacturers revive public purchasing power in the future.

“We are collaborating to create demand, so that we have production. So, like it or not, we must address this together,” Agung affirmed.