Indonesia auto sales fall for fourth month
High rates and weak demand weigh on 2025 market outlook
Indonesia’s automotive market recorded a fourth straight month of decline in August 2025, with total vehicle sales dropping 19 % year‑on‑year to 61,780 units, down from 76,302 the previous year. The Association of Indonesian Automotive Industries (GAIKINDO) noted that, although sales were slightly higher than July’s 18 % fall, the overall trajectory remains negative.
The slowdown is linked to a combination of high interest rates, persistent inflation eroding household purchasing power, and waning consumer confidence amid economic uncertainty. Prospective buyers are postponing purchases, awaiting clearer signs of stability or potential incentives.
Passenger‑car sales suffered the steepest decline, while commercial‑vehicle demand held up better, buoyed by infrastructure projects and industrial needs. Leading brands—including Toyota, Daihatsu, Honda and Mitsubishi—reported weaker performance across the board, and even low‑cost green cars (LCGCs), traditionally resilient in downturns, saw reduced demand.
Industry forecasts had projected 750,000‑900,000 unit sales for 2025, but the current trend suggests the full‑year target may be missed unless conditions improve rapidly. Dealers are urging the government to consider temporary tax breaks, credit easing and stronger consumer stimulus to revive demand.
The auto sector’s slump carries broader economic implications. It is a significant contributor to Indonesia’s GDP and employment, with extensive supply‑chain links in parts manufacturing, logistics and retail. A prolonged contraction could dampen overall growth, especially as exports also face global headwinds.
Manufacturers remain cautiously optimistic about the long‑term outlook, citing Indonesia’s large population and expanding middle class. Nonetheless, they acknowledge that 2025 is shaping up as one of the toughest years for the sector since the pandemic, highlighting the need for coordinated measures to restore consumer confidence and stabilize demand.
