Indonesia car survey: overcoming barriers to car purchase

Kenny
Oct 08, 2024

Demand for passenger cars is declining

The Indonesian automotive market in 2024 presents both challenges and opportunities for automakers. Car sales in Indonesia experienced a significant decline in 2024, with a 12% decline in consumer sales from January to August compared to the same period in 2023 based on the data from Gaikindo (the association of Indonesia automotive industries). This downward trend of car purchases highlights the weakening demand in the automotive sector, which various economic factors could influence. The shrinking sales figures reflect growing challenges for manufacturers and dealers in Indonesia.

The Cimigo Indonesia car survey, which included 300 respondents, revealed barriers to car purchase and highlighted how automotive brands can adjust their strategies to meet consumer needs.

The Indonesia car survey confirms the subdued demand

The Cimigo Indonesia car survey reveals that 42% of respondents do not intend to purchase a car within the following year. This trend is particularly pronounced among Gen X, where 46% of individuals have no plans to buy a car, followed by 43% of Gen Y and 37% of Gen Z respondents.

Additionally, 37% of respondents remain undecided about making a car purchase. This indecision is relatively consistent across generations, with Gen Z at 39%, Gen Y at 35%, and Gen X at 37%.

Indonesia car purchase intention

 

Several hurdles were identified in the survey for those who already own a car but do not plan to buy another. However, these barriers also point to opportunities:

  • 61% cited the reliability of their current vehicle, suggesting that they are holding off on purchases. Automakers can tap into this by promoting new models that offer advanced technology upgrades or improved fuel efficiency, making an upgrade more attractive.
  • 41% of respondents mentioned budget constraints, indicating that affordability is critical. This opens the door for affordable financing plans, flexible leasing options, and lower-cost models to encourage upgrades.
  • Higher maintenance costs (25%) and expensive market prices (23%) were also mentioned, suggesting that promoting long-term savings through better fuel efficiency or lower running costs could be persuasive in overcoming hesitation.
Indonesia car purchase barriers among car owners

 

Car non-owners also face their challenges when considering purchasing a car. Automakers can focus on solutions to these hurdles to convert non-owners into buyers:

  • 66% said they lacked the budget to buy a car. This underscores the need for manufacturers to introduce cost-effective solutions, such as entry-level models.
  • 48% mentioned that owning a car doesn’t fit their lifestyle. The majority of this group relies heavily on motorbikes, with 85% citing it as their primary mode of transport. Public mass transportation follows at 46%, while 12% opt for public cabs such as Jaklingko or similar local services. This indicates a strong preference for more flexible, cost-effective, and accessible transportation
  • Other barriers include traffic congestion (20%) and concerns about the depreciation of car value (9%).
Indonesia purchase barriers among potential first time buyers

Turning challenges into opportunities

Despite the challenges highlighted by the Cimigo Indonesia car survey, there are clear opportunities for automakers willing to adjust their strategies. The undecided 37% of respondents represent a valuable group that can be persuaded with the right mix of product features, pricing, and incentives.

The key to overcoming barriers in car sales may lie in affordability, lifestyle alignment, and innovation. By crafting solutions that address these concerns, automakers can position themselves to succeed in a changing market.

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