Falling Benchmark Interest Rate Said to Impact New Car Loans

KatadataOTO – Bank Indonesia lowered the benchmark interest rate or the BI rate in mid-January 2025. This was done to maintain the rupiah exchange rate and encourage economic growth.

The decrease in the benchmark interest rate affects several things, one of which is new car loans, potentially having a positive impact on sales at the beginning of the year.

Moreover, there are many challenges in the automotive industry in 2025, such as the implementation of VAT (Value Added Tax) to 12 percent and optional levies in several regions.

“There will be potential for (sales) to increase. Car loan payments will be lighter for the public,” said Ferry, Chief Operating Officer of Hyundai Gowa in Cikarang some time ago.

Photo : KatadataOTO

He revealed that public purchasing power has indeed tended to weaken due to various issues, one of which is the 12 percent VAT. 

According to him, the interest rate reduction can be considered a stimulus to help boost new car sales at the beginning of the year.

“Especially for cars, in our data, the average is three to five years (tenor). The one to three-year tenors are relatively small,” said Ferry.

Because the installment period is quite long, Ferry does not deny that some potential buyers are waiting for certainty, anticipating if the interest rate changes again, especially in the near future.

Hyundai itself is actively introducing various new products to provide many choices for consumers, considering that their purchasing power is considered to have weakened this year.

Photo : KatadataOTO

Throughout late 2024, a number of new models were brought by PT HMID (Hyundai Motors Indonesia) to the domestic market. For example, the Kona EV electric car, Santa Fe Hybrid, Tucson Hybrid, Kona EV N Line, and the New Creta in early 2025.

Many of them are already locally assembled at the facility owned by PT HMMI (Hyundai Motor Manufacturing Indonesia). So their prices can be competitive compared to similar models in the same segment.

For this year, the South Korean brand is committed to presenting more options to the public. So far, it has been confirmed that there will be seven new models, all of them a combination of pure electric cars and hybrid cars.