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Nov 24
Monday

Higher Fuel Price affecting Indonesia’s Auto Market

Filed under Asia News, Southeast Asia, Business & Politics

Jakarta Traffic (Point: Auto)Indonesia’s petrol-price hike could put the brakes on the speed at which consumers in Southeast Asia’s biggest auto market buy cars and switch to four-wheels from two.
President Joko Widodo last week cut subsidies and raised gasoline prices more than 30 percent to open the way for budget and other reforms.
In the long-term, the change should strengthen the Indonesian economy, now growing at its slowest pace in five years. In the short-run, it may impact auto sales.
Next year “car sales probably won’t grow,” said Leonardo Henry Gavaza, a senior research manager at Bahana Securities. “Motorbike sales will be more resilient.”
Growth rates have been declining since 2010’s stunning 58 percent rise. January-October saw only a 1.8 percent increase for a year earlier, reflecting how annual economic growth has slipped to 5 percent.

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