Car Sales Could Improve by Year-End, Here's What It Takes

KatadataOTO – Car sales retail in July 2025 experienced a slight increase from the previous month. Compared to the same period last year, the figures are still far behind.

The Association of Indonesia Automotive Industries (Gaikindo) is indicated to revise its target if the situation does not improve.

Nevertheless, economists believe there is still a chance for an improvement in car sales. Especially towards the end of 2025, if supported by programs or promotions from vehicle brands.

From the perspective of Bank Indonesia (BI), it was mentioned that the interest rate has been cut to 5.25 percent with a chance of continuing if exchange rate stability is maintained.

Photo : Mitsubishi

“The decrease in the cost of funds will trickle down to vehicle loan interest rates with a lag of one to two quarters, coupled with the seasonal pattern of the fourth quarter (year-end promotions) and the normalization of government spending in the second half,” said Josua Pardede, Chief Economist of Permata Bank to KatadataOTO, on Monday (11/08).

In addition, a solution that manufacturers can implement in the first half of 2025, according to Josua, is a combination of promotions such as interest subsidies from financing company partners, price adjustments, and product line adjustments.

For credit purchase transaction programs, Josua believes they should be implemented more aggressively in provinces where credit has recovered.

Then, manufacturers can start introducing non-premium hybrid variant cars that can help save fuel consumption and address ownership cost efficiency.

“And establish official certified used-car (official used car dealers) to capture the down-trading trend while maintaining the brand's residual value,” Josua affirmed.

GJAW 2025 Exhibition Becomes a Hope

Speaking of year-end promotions, these are usually offered extensively by manufacturers at exhibitions like the Gaikindo Jakarta Auto Week, or GJAW 2025, held towards the end of this year.

Considering GIIAS 2025 did not seem to generate transactions as expected, GJAW 2025 is projected to be the right moment for manufacturers to boost car sales figures.

Photo : KatadataOTO

“We know that later at the end of the year there will be the Gaikindo Jakarta Auto Week. It is specifically created to carry out year-end promotions,” said Yohannes Nangoi, Chairman of Gaikindo, in Tangerang some time ago.

GJAW 2025 will be held in November 2025 at the same venue as GIIAS, namely ICE BSD, Tangerang.

At last year's event, GJAW involved Mandiri Utama Finance (MUF) as the main financing company sponsor, offering ease of purchasing new cars.