Indonesian Automotive Industry Cautious Amid Sluggish Car Market

October 18, 2025 | 01:49 pm

TEMPO.CO, Jakarta - The automotive industry is cautious in setting prices and target markets amid the sluggish economy due to weakening purchasing power and global economic instability.

"The market conditions remain sluggish, purchasing power is declining, so we need to pay more attention to consumer behavior, and why they postpone their purchases. That ought to be explored," said the Head of Dealer Network Development at Jaecoo Indonesia, Setia Hariadi, in Yogyakarta on Friday, October 17, 2025.

The Indonesian Motorcycle Industry Association recorded that direct-to-consumer sales from January to June 2025 only amounted to 390,467 units, dropping 9.7 percent compared to the same period in 2024. Meanwhile, wholesale sales, or sales from distributors to dealers, are down 8.6 percent to 374,740 units, compared to the previous 410,020 units.

Setia revealed that manufacturers also consider market situation and competitors while determining prices, to ensure competitive values of their products. Especially if the product is priced above Rp500 million or excluded from the Low Cost Green Car (LCGC) type.

In this sluggish economic situation, consumers will think more deeply about the costs they have to bear and the benefits or advantages of the products they get.

"Consumers nowadays want to know for sure, the selling point of the product compared to competitors," he said.

According to Setia, while deciding to expand market reach, manufacturers must also pay attention to the main regions with higher product sales. In that case, Greater Jakarta and Java regions remain the main targets to open new dealerships to achieve sales targets.

"Our target this year is to have 30 dealers in operation, but at present, only 10 are operational. There are no dealers yet in some of the islands outside Java," said Setia, who targets sales of 500 units this year.

According to him, the automotive industry must reach more customers who are within its target to overcome the sluggish market. For example, holding exhibitions at the mall to attract buyers of products priced above Rp500 million. 

"We just need to find the places where they usually gather and find out what they need. Strengthen digital marketing expansion, but do not neglect exhibitions in public spaces such as malls," he said.

Meanwhile, Irawan Nurisman, as the Director of PT Sumber Baru Wahana Motor in Yogyakarta, a tourist city, is supported by several shopping centers to become an exhibition venue when new products emerge.

"Consumers who are the target market often spend their time in shopping centers during holiday seasons, so that's what we are aiming for by increasing exhibitions during weekends," he said.

In addition to shopping centers, consumers are also usually offered to check out the complete products directly at dealerships.

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