Depressed Car Sales Cause Indonesia's Economic Value to Drop by IDR 10 Trillion

KatadataOTO – The decline in vehicle sales in Indonesia has a broad impact on the overall economy. This is because the impact of the decline affects not only cars but also supporting industries.

Based on data from the Ministry of Industry, the total economic value lost reaches trillions of rupiah. This is certainly unfortunate because the country is the largest automotive market in Southeast Asia.

“The automotive market in Indonesia fell by 3.1 percent in 2024, resulting in a loss of economic value amounting to IDR 10 trillion,” said Agus Gumiwang Kartasasmita, Minister of Industry, in Jakarta (05/06).

This amount consists of the upstream sector (metal, electrolyte, and rubber) at IDR 5.4 trillion and the downstream sector (logistics, trade, service) at IDR 4.6 trillion.

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Nevertheless, he remains optimistic that the industry can still grow because the market potential in Indonesia is very large. This is because Indonesia's current population reaches 278 million people, the largest in Southeast Asia.

However, the car ownership ratio in the country is still relatively low, so the growth potential for motor vehicles is still significant.

“In the context of electric vehicles, the government certainly does not want Indonesia to just be a market but also to become a production base. A number of steps have been taken, which include developing the automotive industry from upstream to downstream,” he emphasized.

It should be noted that car sales in Indonesia experienced a significant decline in 2024 compared to the results in 2023. Based on Gaikindo data, wholesale vehicle sales from January to December were only 865,723 units.

This means there was a correction of 140,079 units, or about 13.9 percent, from the previous achievement of 1,005,802 units. Nevertheless, this number is still in line with Gaikindo's revised target of 850,000 units.

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The pressure from 2024 was still felt in the first quarter of 2025. This is evident from the decline in sales figures during that period.

Based on Gaikindo data, car sales from January to March 2025 were only 205,160 units. That number is down 4.7 percent compared to the same period last year, which reached 215,250 units.