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Despite obstacles, Mazda optimistic for Indonesian car sales

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With a new law requiring Indonesian car buyers to put down a 25% to 30% payment on new car purchases beginning June 15, naysayers are predicting auto sales in Indonesia will dip. Mazda ( MZDAY , quote ), however, sees growth.

[caption align="alignright" caption="The Mazda CX-5 at the Tokyo Auto Show, 2011"] Image courtesy NJo: http://commons.wikimedia.org/wiki/File:Mazda_CX-5.jpg [/caption]

Currently there are no regulations requiring car buyers to make a down payment, but lenders usually expect 15%.

Mazda is aiming for a 33% increase in sales this year. Having sold just 8,996 vehicles in Indonesia last year out of 894,180 globally, the Japanese automaker undoubtedly has plenty of room for growth.

In a bold show of confidence, it introduced its CX-5 sports utility vehicle to the Indonesian market last week even as the government continues to consider legislation that would end fuel subsidies.

Additionally, Mazda plans to open seven more dealerships, bringing the total number to 37 in Indonesia.

"Despite [the Association of Indonesian Automotive Manufacturers'] predicting there will be a decline in sales this year, Mazda is optimistic the sales target of 12,000 units is achievable ," said Astrid Ariani Wijana, marketing manager for subsidiary Mazda Motor Indonesia.

With a rising middle class, low inflation, and low interest rates, Mazda believes it can defy any dip in sales caused by the new down-payment requirement.

Auto sales in the first quarter of 2012 rose 11% over last year to 249,589 vehicles. Fuel efficient models may also help Mazda succeed; the CX-5's new engine can reportedly get up to 45 miles per gallon.

"We only targeted a 30% sales increase in 2011, but sales rose by more than 50% to 9,000, exceeding our target of 8,000 cars," said Keizo Okue, president director of Mazda Motor Indonesia.

" Indonesia is one of our biggest markets in Southeast Asia . With the launch of the CX-5, we are showing how important we view the Indonesian market for Mazda and how we are committed to bringing our latest products here," added Masahiro Moro, Mazda's executive officer for global sales and marketing at the launch of the CX-5.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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