Indonesian Automotive Sector Slowdown Impacts Banking Sector

Vehicle Sales Performance

Indonesia's automotive industry is facing a significant slowdown in 2025, affecting banks' vehicle loan portfolios. According to data from the Indonesian Motor Vehicle Industry Association (Gaikindo), retail car sales reached 79,310 units in November 2025, representing a 3.7% year-on-year increase. However, cumulative sales for the year have declined by 8.4% to 739,977 units compared to the previous year.

Motorcycle Sales Trends

The motorcycle segment showed slightly better performance. Data from the Indonesian Motorcycle Industry Association (AISI) revealed that domestic motorcycle sales grew by 2.1% year-on-year to 523,591 units in November 2025. For the full year, motorcycle sales recorded a 0.35% increase to 5.95 million units. While this represents positive growth, the rate remains marginal.

Impact on Banking Sector

The slowdown in vehicle sales has direct implications for banks' vehicle loan (KKB) performance. Weaker sales figures typically translate to reduced credit growth and potentially higher default rates in the automotive loan segment. Banks are likely to face increased pressure on their credit portfolios as the economic conditions continue to affect consumer purchasing power and overall demand for vehicles.