Car down payment regulation will affect potential investment

Car down payment regulation will affect potential investment

Photo dokumen of Gaikindo expo car. (ANTARA/Lucky.R)

"The hike in car credit down payment to 30 percent will affect middle-class consumers."
Jakarta (ANTARA News) - The Association of Indonesian Auto Industries (Gaikindo) has urged the government to not issue a regulation that is likely to have a negative impact on the national auto market and discourage potential investors.

"Indonesia must not develop regulations that could downsize the market. That might make current investors think that the market is declining, and they might move away to Thailand or Malaysia," Gaikindo chariman Yongkie D Sugiarto said here on Friday.

With the new regulation, the minimum down-payment requirement for cars will be raised to 30 percent of the sales price.

"The regulation will cause problems for consumers who buy cars priced below Rp200 million. That segment accounts for about 50 percent of the total number of car buyers in the country," Sugiarto noted.

"The hike in car credit down payment to 30 percent will affect middle-class consumers who wish to own a car," he said.

The government has developed the regulation in an effort to minimize potential bad debts.

Meanwhile, Gaikindo general chairman Sudirman M. R said the government must continue to focus on infrastructure development in order to speed up economic growth, which would lead to increased car sales.

"The development of infrastructure such as roads and ports must be accelerated so automotive industries can continue to grow," he added.

Sudirman stated that a rise in car sales would be followed by increased investment in the auto industry.

"In order to raise the production capacity of domestic factories and meet rising market demand, car distributors have asked their principals to invest and expand in Indonesia," he said.
(T.KR-IAZ/H-YH/INE/KR-BSR)

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