Used Cars Become Consumers' Choice Amidst Weakening Purchasing Power

KatadataOTO – Car prices for cheap models that have started to skyrocket are making them unaffordable for many consumers. 

However, car types like the Low Cost Green Car (LCGC) are intended for first-time car buyers. Their prices are starting to exceed Rp 200 million on the road in Jakarta.

Coupled with economic uncertainty, the public's purchasing power in the automotive sector has not yet recovered to the levels of previous years.

Economists see the consumer shift to used cars as an indication of a declining market and suppressed purchasing power among the lower class.

Photo : OLX Autos

“Downtrading is occurring; financing for used cars is growing by double digits while new car financing is contracting,” said Josua Pardede, Chief Economist at Permata Bank, to KatadataOTO recently.

According to him, this is an indication that consumers are moving down-market to maintain their installment payments.

In addition, Josua also highlighted that the LCGC segment is facing challenges and recording worse sales than the overall market.

Therefore, he emphasized the need for the government to implement effective fiscal policies.

Especially for vehicle types targeting first-time car buyers or the lower-middle segment. This could contribute to domestic four-wheeled vehicle sales.

From the manufacturer's side, Josua said that they could set up official used car dealerships.

“Establish official certified used-car programs to capture the downtrading trend while preserving the brand's residual value,” Josua asserted.

For your information, the wholesales figures (distribution from factory to dealer) for four-wheeled vehicles increased in July 2025.

However, several brands actually saw a decline, including Chery, which has been aggressively introducing new models at low prices for consumers.

From 2,150 units in June 2025, that figure dropped by 20.6 percent to only 1,705 units throughout July.

Photo : KatadataOTO

In total, at least 12 car brands experienced a sales decline in the middle of the year. 

Seeing the unstable market conditions, the Association of Indonesian Automotive Industries (Gaikindo) is even considering revising this year's car sales target.

However, the realistic target in question has not been clearly disclosed. Gaikindo is reluctant to speak further on the matter.