Indonesia’s auto sales slump as savings erode and borrowing costs rise

[JAKARTA] Indonesia’s ambitions to become a key player in the electric vehicle (EV) industry are challenged by an automotive sector still struggling to recover from the pandemic, with national car sales dropping 21 per cent year on year in May due to high interest rates, diminished middle-class purchasing power and limited financing.

Industry watchers anticipate slower growth in the country’s auto industry this year, as consumers grapple with diminished middle-class purchasing power due to dwindling savings and high interest rates.

This year, national car sales are expected to fall short of the one million mark set by the Association of Indonesia Automotive Industries (Gaikindo).