Indonesia Used Car Market Surpasses 2.5 Million Units Sales, Reflecting Resilience Amidst Challenges

The Indonesia used car market has indeed exhibited resilience amidst the challenges posed by the Covid-19 pandemic. Despite the upheavals in various sectors, the Indonesia used car industry has managed to maintain a positive trajectory, with consumers increasingly favoring pre-owned vehicles over new ones. This shift in consumer behavior is evidenced by the remarkable volume of used car sales, which surpassed 2.5 million units in 2019, highlighting a growing preference for affordable options with depreciated values.

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Indonesia Used Car Market Analysis and Forecast (2019-2030) - by Brand, Car Type, Body Type, Fuel Type, Cities and Age Group
https://www.makreo.com/report/indonesia-used-car-market-analysis-and-forecast-2019-2030

Throughout the COVID-19 pandemic, Indonesia's used car market experienced notable growth, propelled by evolving mobility needs amidst the onset of the global health crisis. Similar to trends observed in other retail sectors, the pandemic prompted a significant portion of consumers to turn towards online channels for their car purchasing endeavors. Moreover, the global chip shortage adversely affected the production of new cars, thereby amplifying the appeal of used vehicles as the primary mode of transportation for many Indonesians. Consequently, the Indonesian used car market witnessed double-digit growth in 2023, showcasing its resilience in the face of adversity.

However, despite its commendable performance, the Indonesia used car market is not without its challenges. The industry grapples with various obstacles, including regulatory complexities, fluctuating demand patterns, and logistical hurdles. Additionally, ensuring the quality and reliability of used cars remains a crucial concern for both buyers and sellers. Addressing these challenges will be pivotal in sustaining the momentum of growth and fostering the continued development of the used car market in Indonesia.

► Company Performances Reflecting Growth in the Indonesia Used Car Market
Adi Sarana Armada's revenue breakdown by sales of used vehicles grew by 56% Y-o-Y in 1Q of 2022 and operating margins from sales of used vehicles also reached a growth rate of 6.8% Y-o-Y in 1Q of 2022 from 1Q of 2021 thus showcasing a positive growth trajectory of the used car market in Indonesia.

► Indonesia's Automotive Sector: Driving Economic Growth
■ The automobile sector, which contributed 4% to Indonesia's GDP in 2021, remains a pivotal driver of economic growth. Continuous research and development efforts bolster the nation's automotive industry, amplifying its impact on the economy. The Indonesia used car industry, an integral component of the automotive sector, plays a significant role in this growth trajectory.

■ The sustained economic expansion in Indonesia has spurred a notable increase in automotive production. This growth aligns with the rapid penetration of the used car market, reflecting the nation's rising per capita income. As a result, the used car industry in Indonesia presents vast revenue opportunities and serves as a crucial source of employment, further propelling the nation's development agenda.

► Dynamics of Indonesia's Used Car Market
The Indonesia used car market faced a significant downturn in demand during mid-2021 but experienced a rebound by the end of the third quarter. In subsequent years, there has been robust growth in the Indonesia used car market, driven by factors such as improved income levels and increased mobility. Consumers are showing a greater inclination towards upgrading cars, leading to shifts in Indonesia used car market dynamics. Moreover, enhanced accessibility to Indonesia used car finance options has further fueled this growth. However, along w+ith opportunities, the Indonesia used car market also faces challenges such as competition and regulatory changes. Overall, the Indonesia used car market presents promising opportunities for growth and investment.

► Emerging Trends and Challenges in the Used Car Segment
The Indonesia used car market is witnessing significant growth due to shifting consumer behavior and increased demand for affordable options. Consumers are showing a heightened intention to upgrade vehicles, driving opportunities in Indonesia's automotive industry. Improved accessibility to car financing options is further stimulating demand for used cars, particularly among specific population segments. However, the rising popularity of electric vehicles poses a challenge, necessitating adaptation and innovation in Indonesia used car trends.

► New Car Sales Decline while Used Car Market Gains Traction in Indonesia
■ According to the data from the Association of Indonesian Automotive Manufacturers (Gaikindo), retail sales of new cars as of March 2022 in the Indonesia amounted to 98,524 units. Whereas, used automobile sales have increased over this time.
■ According to CEO of the online marketplace BeliMobilGue, "monthly sales of used cars can approach 300,000 autos, which is pretty big. "The used car market in Indonesia is severely fragmented, which creating a competitive weather among the market.

► Balancing New and Used Car Sales in Jakarta
In the context of Indonesia's automotive industry, particularly in Jakarta, there's a noteworthy shift occurring in the balance between new and used car sales. The market dynamics reveal a growing trend where the sales of both new and used cars are converging, especially in Jakarta. However, this trend is not consistent across all major cities in the country. In some areas, the ratio of new cars to used cars remains significantly imbalanced, with the dominance of used cars evident. In fact, the overall ratio of used cars to new cars was 4:1 in 2022, indicating a substantial opportunity for growth in the used car market nationwide. This trend is further underscored by the high levels of trade-in exports within the automobile industry.

► Carro's Strategic Expansion and Market Impact in Southeast Asia
Carro's impact in Indonesia has been notable, with more than 5,000 used car dealers, its primary target customers, now utilizing its platform. This represents approximately 30.6% of new automotive sales in Southeast Asia. Carro's Buyback platform has proven instrumental, enabling dealers to expand their inventory size, sales, and profitability by up to three times, according to the company.

► Rising Competition Impacting Used Car Prices
The Indonesia used car market is facing increasing competition from new vehicles, which could potentially impact used car prices and sales. As new cars become more affordable and come with attractive financing options, consumers are leaning towards them instead of used cars. This shift in preference may lead to a decrease in demand for used cars, resulting in a decline in market prices. The Indonesia used car market is experiencing intense competition from the automotive industry, posing challenges to its growth and sustainability. Keeping an eye on Indonesia used car trends is crucial to identify opportunities in this changing landscape.

► Conclusion
The Indonesia used car market has exhibited remarkable resilience amidst the challenges of the Covid-19 pandemic, maintaining a positive trajectory despite upheavals in various sectors. The industry experienced notable growth, driven by evolving mobility needs and the global chip shortage, which amplified the appeal of used vehicles. Despite commendable performance, challenges such as regulatory complexities and fluctuating demand patterns persist, necessitating strategic solutions for sustained growth.
The automotive sector remains a vital driver of Indonesia's economic growth, with the used car industry playing a significant role in this trajectory. However, the market faces increasing competition from new vehicles, potentially impacting prices and sales. While the shift towards new cars presents challenges, it also underscores the need for adaptation and innovation in the used car segment.

The dynamics of Indonesia's used car market reflect a balance between opportunities and challenges. While consumer behavior and increased affordability drive growth, competition and regulatory changes pose hurdles. Nonetheless, the market presents promising opportunities for investment and development.
In conclusion, the Indonesia used car market's resilience and its integral role in the nation's economic growth underscores its significance. Addressing challenges and capitalizing on emerging trends will sustain momentum and foster continued development in this dynamic industry.

► Period of Study:
2018-2023: Past and Present Scenario
2023: Base Year
2024-2028: Future Outlook of the Market

► Key Areas Discussed in the Report:

► By Brand
Toyota
Daihatsu
Honda

► By Car Type
Toyota Avanza
Daihatsu Sigra
Mitsubishi Xpander
Honda Mobilio

► By Body Type
Sedan
SUV
Hatchbacks
MPV
Commercial
LCGC

► By Cities
Jakarta
Sumatra
Surabaya
Medan

► By Fuel Type
Petrol
Diesel
Hybrid
EV

► By Age Group

► Competitive Landscape:
Mergers/Acquisitions/Divestments
Funding Timeline
Company Profiles

► Companies Covered:
Carsome
mobil88
Toyota Trust
PT Tunas Ridean Tbk
iCarAsia
PT Serasi Autoraya (SERA)
Oto.com
Carro
Autopedia Sukses Lestari Tbk

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India Used Car Market Size and Forecast (2018-2030) - Segmentation by Dealer Type, Sales Mode, Car Type, and Demand by Cities
https://www.makreo.com/report/india-used-car-market-size-and-forecast-2018-2030

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