Car Sales Slump Below One Million Units as Auto Industry Faces Peril
Main Takeaways
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JAKARTA, Investortrust.id — Indonesia’s automotive industry is showing signs of deepening distress, with annual car sales slipping below one million units for the second consecutive year—an alarming trend that could threaten over a million jobs.
The Indonesian Automotive Industry Association (Gaikindo) has voiced serious concerns over the potential for mass layoffs across the sector, which directly employs an estimated 1.5 million workers. The industry’s total production capacity stands at 2.2 million four-wheeled vehicles per year.
“We must pay close attention to the 1.5 million workers in this industry during these difficult times. We do not want to see mass layoffs,” said Gaikindo Secretary General Kukuh Kumara during a working committee meeting with Commission VI of the House of Representatives on Thursday, July 10.
Car sales in Indonesia peaked above one million units annually starting in 2013, positioning the country as part of the global “One Million Club”—a group of nations with production and sales volumes exceeding one million cars per year. But the last two years have marked a reversal.
In 2024, domestic four-wheeled vehicle sales totaled just 865,000 units, a sharp drop from the industry’s historical performance. “We’ve been declining for two years now. Last year’s figure of 865,000 units is a serious concern,” Kukuh added.
Global Turbulence and Local Struggles
Industry leaders cite not only softening domestic demand but also persistent global economic uncertainty as key factors behind the slump. Heavy reliance on imported components, shifts in consumer trends, and tighter fiscal policies in major markets have compounded the pressures on Indonesian automakers.
Gaikindo has urged both government and industry stakeholders to reassess the country’s automotive strategy, warning that without intervention or incentives, the long-term viability of the sector—and the jobs it supports—may be at stake.