Prolonged Protests Will Further Squeeze the Automotive Industry

KatadataOTO – A wave of demonstrations continues to sweep Indonesia. The first took place on Monday (25/08) at the DPR RI Building.

The public rejected the allowances for DPR RI members, which are considered to have a fantastically high value.

Then another demonstration occurred on Thursday (27/08). Several elements of society united to voice their opinions.

From laborers, vocational high school students, university students to Online Motorcycle Taxi (Ojol) drivers, they all conveyed their aspirations at the DPR RI Building.

Photo : Antara

The demonstration heated up when seven Brimob members took repressive action, hitting an Ojol driver named Affan Kurniawan until he passed away.

This sparked public anger in several regions. From Jakarta, Bandung, Surabaya, Makassar to Yogyakarta.

Clashes between the protesters and the police were quite fierce. The rock-throwing continued until Friday (29/08) night.

Even a number of public facilities and DPRD buildings in several areas were engulfed in flames.

If this situation continues for the next few days, it will have a negative impact on industries such as the automotive industry in the country.

"Such as the risk of supply chain disruptions due to continued strikes or riots that could worsen economic uncertainty," said Yannes Martinus Pasaribu, an automotive expert and academic at the Bandung Institute of Technology (ITB), to KatadataOTO.

Furthermore, if the demonstrations spread and become uncontrollable, it could reduce foreign investor confidence.

Meanwhile, in the short term, it could disrupt the production activities of domestic manufacturers.

In addition, public purchasing power will also decline. This is because many people will choose to save their money and not spend it until the situation returns to normal.

Of course, this will be detrimental to the Indonesian automotive industry. Considering that the sector is currently struggling to recover.

"The government must cool down this potentially escalating situation by immediately responding to the existing demands," Yannes continued.

Yannes hopes that the wave of demonstrations in various regions of Indonesia can be handled by security forces soon.

Then the situation can gradually recover. So people can carry out their activities as usual.

"Hopefully, the existing demonstrations can be controlled peacefully, unlike on May 13, 1998," Yannes emphasized.

Photo : Courtesy

As a reminder, car and motorcycle manufacturers in Indonesia are currently struggling to recover.

This is because since the beginning of the year, the two-wheeled and four-wheeled vehicle market has been sluggish. So domestic sales have dropped drastically.

Therefore, if the riots do not subside, business actors in the automotive sector will be further squeezed.