Sunday, July 16, 2006

Motorcycle sales drop 26.2%

Motorcycle sales in the first half 2006 dropped 26.2% from the same period last year, Tempointeraktif.com reported Sunday quoting data from industry association.

According to Indonesian Motorcycle Industry Association, motorcycle sales in H1 2006 reached 1.81 million units, dropped 26.2% from the same period last year at 2.45 million unit. The report is pretty much in line with earlier prediction that motorcycle sales this year would drop 25% on high interest rate and weaker purchasing power.
Ridwan Gunawan, chairman of the association, meanwhile praised the increasing monthly sales since April and expecting higher sales in second half. But he was pretty sure the year's total sales will not match last year's 5.1 million units. He predicted the total sales would only reach 4 million units.
Car sales also dropped significantly by 49% to 149,000 units in the first half. Central Bank's decision to cut it's benchmark rate by 25 points last week is seen as signal of further reduction that will eventually push banks to lower lending rates. But the recent oil price hike following the security concern in Middle East might potentially ruin the central bank's plan.
Positive side: Lower automotive sales give time to authorities to fix the country's crazy public transportation, especially the bad traffic in Jakarta.
Negative: Automotive-related stocks, including financing, and job market.

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