Weak rupiah driving Japanese carmakers to expand in Indonesia

Jakarta

THE rupiah's descent to a 17-year low is building the case for Japanese carmakers to focus on rolling out cheaper, locally made sedans and multi-purpose vehicles (MPVs), rather than fighting for a bigger slice of Indonesia's languid market for imported cars.

At just under 7,600 units, Indonesian car imports came in below 10,000 in February for the 11th consecutive month, the latest data from Indonesian vehicle association Gaikindo shows. That's less than 10 per cent of overall new car sales. Imported cars are losing their appeal as the rupiah plunges to its weakest against the dollar since the Asian financial crisis in the late 1990s and as South-east Asia's largest economy grows at a slacker pace.