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31. May 2009

Slowdown signs - Indonesian auto sector to lay off 20%

Antara news reported that Indonesian automotive industries have laid off about 20% of their workers due to the impact of the global financial crisis.

The report cited Mr Bambang Trisulo chairman of the Indonesian Motor Vehicle Industries Association as saying that "Automotive industries were forced to lay off their workers as a result of the drop in their car sales which until the first quarter of this year reached 20% to 25%.” He said that most of those laid off were workers hired on contract basis, while only a small number of regular employees had been laid off.

Mr Trisulo said that it was expected automotive sales would continue to drop until the end of the year. He added that "That’s why we have revised downward our sales target this year to about 400 to 450 thousand units only.” He said that vehicle growth was expected to begin in 2010 but it would be a small growth, about 5%.

Mr Trisulo said that "In 2008 Gaikindo members sold 600,000 units. But because of the global crisis that deals a blow to the economy of the Indonesian people, we set our sales target for this year at 400,000 to 450,000 units.” He predicted that domestic motor vehicle sales would recover in 2010 albeit at a slow pace. But this will depend on how the next government implements its economic policies of boosting growth.

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