Toyota Sees 2026 Car Sales Hinging on Policy and Consumer Confidence

JAKARTA, Investortrust.id — Toyota Motor Manufacturing Indonesia or TMMIN says Indonesia’s car sales outlook in 2026 hinges on government policy, banking liquidity, and consumer confidence, as uncertainty clouds demand in a market where most purchases rely on credit. The assessment came after a year when auto shows helped cushion weak sales, underscoring how fragile the recovery remains.

Bob Azam, vice president director of TMMIN, said sales momentum would be driven by policy direction, financial system liquidity, and households’ willingness to spend. “We look at the drivers in 2026. Usually sales are determined by government policy, then liquidity, and then purchasing power going forward,” he said at a media workshop in Bandung on Friday, Jan 9, 2026.

Azam said global dynamics could offer a short-lived boost, particularly if the United States and China move toward quantitative easing. Such liquidity injections, he said, typically push capital into emerging markets like Indonesia, lifting stock prices temporarily before volatility returns.

“But that is only temporary, perhaps for one or two years, then it comes back down and can fall even deeper,” Azam warned, pointing to the risks of relying on external capital flows rather than domestic fundamentals.

A bigger concern, he said, is the health of Indonesia’s banking sector. Credit growth has slowed sharply in recent years, dropping from around 20 percent to about 7 percent, at a time when 70 to 80 percent of car purchases depend on financing.

“In the middle segment, the issue used to be financial health. Many wanted to buy cars but were not financially sound, so banks were reluctant to extend credit,” Azam said. For higher-income buyers, he added, confidence matters more than cash availability. “They have the money, but if confidence is low, they will reduce spending.”

The caution from Toyota contrasts with the relative success of auto exhibitions in 2025, which helped sustain demand in an otherwise sluggish market. Indonesian Automotive Industry Association (Gaikindo), said six major exhibitions last year generated more than 60,000 vehicle sales, up 14 percent from 2024, and drew more than 780,000 visitors nationwide.

Putu Juli Ardika, Gaikindo’s chairman, described 2025 as a challenging year for the industry, with exhibitions playing a crucial role in keeping consumer interest alive. “These exhibitions are our effort to show industry development while maintaining market enthusiasm,” he said.

The flagship Gaikindo Jakarta Auto Week in November alone sold more than 14,000 vehicles, more than 20 percent higher than the previous year, according to Gaikindo. Anton Kumonty, the association’s chief organizer, said the turnout reflected enduring trust in the automotive sector despite economic headwinds.

Still, the broader picture remains weak. National wholesales in the first ten months of 2025 fell 10.6 percent year on year to about 636,000 units, while retail sales dropped nearly 10 percent. Sales of low-cost green cars plunged by more than 30 percent, highlighting pressure on lower-income consumers.

Gaikindo has said it hopes sales can approach 800,000 units, below earlier targets but close to 2024 levels, if conditions improve toward the end of the year. That optimism, however, depends on the same factors Toyota highlighted: policy support, credit availability, and a rebound in household confidence.

For now, Indonesia’s car market is caught between short-term stimulus hopes and longer-term structural constraints, leaving 2026 prospects finely balanced.