A light reading on key driving factors if Indonesia vehicle sales (car retail sales and motorcycle sales) from 1991 - 2017 September. The upper secton of the graph illustrates the impacts from Government policy, sectoral Regulator policy, as well as political events and social issues related to decline in the vehicle sales. Layering indicates the level of factors: external (global), country level, sectoral level factors. Lower section of the graph illustrates the variables assessed through simple multiple regression, highlighted the two let contributors found on the result of the models (a model for car and another one for motorcycle). Guiding lines provided to show the correlation variables (dependent and independent), which also highlights the lagging effect.

1. 2005-Oct
Fuel Price +88%
2005-Mar
Fuel Price +33%
2005-Nov
Inflation went to 18.4%
 followed by climbing
BI Rate @12.75%
 then lending rate
reached 17.88% in
2006
2011-Q2
Indonesia started experiencing
negative balance of payments
2008-Aug
Inflation went
to 11.9%
 followed by
climbing BI
Rate @9.5%
 then lending
rate reached
16.67% in
Sep’09
2011-Aug
JKSE and Exchange
Rate Fluctuated
due to Global Economy
and uncertainty in US
2012-Q1
 LTV Regulation to 70%
 Coal price ref HBA started
to decline sharply (112.87
in Q1-12 to 96.7 in Q2-12)
 Mineral export ban
formally applied
Economy
supported by
commodity sector
2014 Q3-Q4
Presidential
election,
businesses wait
and see
1997-98
 1997-Aug
Indonesia
economic crisis
 1998-Feb
political
unsability
 1998-May
social unrest
1999
Recovering from
impact of Asian
crisis
2008
Global Crisis
2015 Q1-Q2
 China economy was moderating,
affect Indonesia exports
 Purchasing power declined due
to exchange rate that
as impacted by USD & US
int rate strengthening trend
 Govt’s budget lag, domino effect
to govt’s spending in
infrastructure
Source: Gaikindo data (retail monthly sales excluding wholesales), Bappenas
Source: Asosiasi Industri Sepedamotor Indonesia (AISI), Bappenas
Real effective exchange rate
1994 - Aug 2017
Source: Bank for International Settlements, Real Broad Effective Exchange Rate for Indonesia [RBIDBIS], retrieved
from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/RBIDBIS, November 6, 2017.
Source:
https://news.okezone.com/read/2017/07/15/15/
1737215/penjualan-mobil-auto2000-semester-
i-2017-turun-8-ini-penyebabnya
Approximately
of vehicle purchases are
financed by bank or
multifinance arrangement
60%
Banks consumer loan interest rate
2001 - Aug 2017
Source: Bank indonesia - Statistik Ekonomi dan Keuangan
A light reading by Adrianus Darmawan
(Units stated in thousands)
(Units stated in thousands)
(Units stated in percentage)
(Units stated in percentage, indexed on 2010. Lower ratio means undervalued)
Source:
http://www.kemenperin.go.id/artikel/4239/Indus
tri-Otomotif-Ketergantungan-Komponen-Impor
Automotive
sector has 80%
dependency to import
Vehicle
Sales
Loan interest
rate
Exchange
rate
Wages Fuel
price
Other
Factors
Factors affecting
production, COGS,
eventually price
Factors affecting
purchasing power
of consumer
Primary needs
Factors that could
leverage vehicle
ownership
Factors affecting
operational cost of
owning vehicle
Loan interest rate impact to
motorcycle sales is 3.4x
larger than the impact to car sales,
based on regression result.
Compared to other observed
variables, loan interest rate variable
also shows largest impact compared
to other observed variables.