Jakarta – Domestic car sales rose 6 percent in the first quarter of this year, but the figure for two-wheelers continued to decline, painting a diverging picture of Indonesian consumers.

Automakers sold 283,245 vehicles in the first three months of this year, up from 267,302 in the same period a year ago, data from the Indonesian Automotive Association (Gaikindo) showed.

"Gaikindo is optimistic to see the car market this year, which is predicted to be better compared to last year," Gaikindo chairman Yohannes Nangoi said over the weekend.

He expects improving economic conditions to boost the purchasing power of middle- to high-income consumers.

Yohannes said two new low-cost green car models in the market, the Toyota Calya and Daihatsu Sigra, boosted sales in the period. Despite the increase, Gaikindo has still set a modest car sales target of 1.1 million units this year, or about 4 percent higher compared with last year.

Motorcycle sales on the other hand, dropped 7 percent to 1,401,538 units during the first three months, according to data from the Indonesian Motorcycle Industry Association (AISI).

AISI expects that 5.9 million units will be sold in the archipelago this year, having revised its previous target of 6.2 million amid challenges posed by a failed harvest, which usually lowers sales outside Jakarta and surrounding areas, as well as lower demand due to higher administrative costs involved in the registration of new vehicles.

Samuel Sekuritas Indonesia economist Lana Soelistianingsih said agricultural commodity prices have declined over the past few years, undermining the incomes of traditional buyers of motorcycles in rural areas.

Larger cities, where online-based ride-hailing services are ubiquitous, also contributed little to motorcycle sales growth.

"From the looks of it, the rise of online ojek [motorcycle taxis] should have increased motorcycle sales, right? Not really. It was merely a shift from regular ojek to Go-Jek, Grab or Uber," Lana said.

Source: http://jakartaglobe.id/business/sales-of-cars-rise-6-motorcycles-drop-7-in-q1/