the Gaikindo Indonesia International Auto Show 2015, Indonesian car sales continued to shrank in August due to people’s weaker purchasing power amid the country’s economic slowdown.
. People’s purchasing power has declined due to the country’s slowing economic growth (in the second quarter of 2015 Indonesia’s GDP growth slowed to a six-year low) and high inflation. The weak rupiah, which has depreciated nearly 15 percent against the US dollar so far in 2015, causes imported inflation (as many car components still need to be imported) hence making cars more expensive in Indonesia. Indonesia’s economic slowdown is partly caused by weak commodity markets. Low prices of palm oil, coal and other commodities cause sluggish car sales in the country’s mining and plantation regions on the islands of Sumatra and Kalimantan.