KONTAN – New car sales in Indonesia declined during the first half of 2025. According to data from the Association of Indonesia Automotive Industries (GAIKINDO), retail car sales from January to June 2025 reached 390,467 units. This figure represents a 9.7 percent drop compared to the same period in 2024, when sales reached 432,453 units.
The decline in new car sales is closely related to the weakening purchasing power of consumers, particularly among the middle-class segment. Data from accounting and audit firm PricewaterhouseCoopers (PwC) Indonesia show that over the past five years, the number of middle-class Indonesians has decreased by around 9.48 million people. This structural shift indicates a broader economic transformation.
A portion of the middle-income group has fallen into the lower-income category due to inflationary pressures, stagnant wages, and rising living costs. These factors have directly impacted consumers’ ability to make large purchases, including four-wheeled vehicles.
“The shrinking middle-class population, combined with high interest rates, inflation, and vehicle tax burdens, has made car prices in this segment increasingly unaffordable,” said Yannes Martinus Pasaribu, an automotive observer from the Bandung Institute of Technology (ITB), as quoted by Kompas.com on Thursday, October 2, 2025.
Several popular models in the affordable car segment have also recorded declining sales. Daihatsu Sigra, for instance, saw a 32.7 percent decrease in the first half of 2025 compared to the previous period. Similar trends were observed with the Honda Brio and Toyota Avanza.
In contrast to the car market, the motorcycle market has remained resilient. For lower-middle-class consumers, motorcycles continue to be the preferred choice due to their affordability, low maintenance costs, and practical usability. This has kept demand for entry-level or affordable motorcycles high despite the slowing economy.
According to Yannes, this shift in consumer preferences signals that automotive manufacturers must adapt their strategies, whether through financing schemes, pricing adjustments, or added product value. “The lower-middle-class segment, which constitutes the largest portion of Indonesia’s population, remains the main market for motorcycles,” Yannes said.
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