Electric vehicles fuel Indonesia’s first car sales growth since June 2023

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JAKARTA (Reuters) -Indonesia’s car sales in February rose 2.2% year-on-year, the first growth recorded since June 2023, data from the country’s car association showed on Tuesday, amid growing adoption of electric vehicles (EV) driven mostly by Chinese brands.

Car sales in Southeast Asia’s largest economy have been facing challenges due to customers’ weak spending power and a tendency to hold off car purchases during the national elections last year, association officials have said.

However, more affordable choices in EVs were seen as a key driver of growth alongside better economic conditions, Jongkie D. Sugiarto, co-chairman of the Indonesian Automotive Industry Association (Gaikindo), told Reuters.

Car sales are among the economic indicators analysts monitor to gauge household consumption in the G20 economy.

A number of Chinese EV brands have entered the Indonesian market in recent years after Jakarta offered a wide range of incentives for EV carmakers who want to invest in the country.

Companies sold 72,295 units to dealers in February, versus 70,772 units last year, the data shows.

Chinese brands BYD and Chery Automobile were among those that recorded the highest annual sales growth in the month, the data showed.

BYD, which has been stepping up its presence in Southeast Asia, began selling its cars in Indonesia last June. The company held around 36% of the market share in battery-based EV sales as of November 2024.

Japanese carmakers such as Toyota, Daihatsu, Honda and Mitsubishi Motors still dominate Indonesia’s car market.

Gaikindo said it expects to sell 900,000 units of cars this year, slightly higher than 2024’s 865,723.

($1 = 16,405.0000 rupiah)

(Reporting by Stefanno Sulaiman and Stanley Widianto; Editing by Tom Hogue, Mrigank Dhaniwala and Janane Venkatraman)