2021 Indonesia Used

Cars Industry
Market Update
 Executive Summary

• Since the beginning of 2021, Covid-19 cases steadily decline while more people are getting vaccines.

• At the same time, most used cars consumers have higher or same income and have fully come back
to the office. Preference to use private cars remains higher than pre-pandemic as consumers are
looking for a safer mode of transportation

• There are two major forces impacting used cars industry: PPnBM (Luxury Tax) relaxation and Ramadan
season

− PPnBM relaxation: The regulation impact 35-45% of used cars transactions decrease the prices by
up to 10%. The regulation changes the behaviors of used cars consumers and dealers

− Ramadan season: Despite travel restriction, used cars demand grow by ~10%, since Buyers are
taking advantage of lower price and needing safer transportation

Source: OLX Autos Indonesia

2
 1. Latest used cars consumers behaviors
Agenda during pandemic

2. Impact of the PPnBM relaxation and

Ramadan season

3. Methodology

3
 1. Latest used cars consumers behaviors
Agenda during pandemic

2. Impact of the PPnBM relaxation and

Ramadan season

3. Methodology

4
Covid-19 cases steadily decline while more people are getting
vaccines
# of Covid-19 confirmed cases # of Vaccines administered

16,000 15,000,000

12,000,000
12,000
9,000,000

8,000 6,000,000

3,000,000
4,000
-
1-Feb 1-Mar 1-Apr 1-May
0
1-Jan 1-Feb 1-Mar 1-Apr 1-May First Dose Second Dose

Source: OLX Autos Indonesia, Kawal Covid-19

5
 Most used cars consumers have higher or same income and
have fully come back to the office
Consumers: Compared to the previous 3 – 4 Consumers: Have you started coming back to the
months, how is your income now? office?
Q3 - 2020
Q4 - 2020
Q1 - 2021

46% 47%
60% 42%
52%
44% 46% 29% 29% 29%
40% 28%
25% 25%
33%

10% 8%
7%

Full work from office Partial work from Work from home
Higher/same income Less income Still unemployed
office (2-3x / week)

Source: OLX Autos Indonesia

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 Use of private cars remains higher than pre-pandemic as
consumers are looking for a safer mode of transportation
Consumers: What is your primary mode of transportation?

Q3 - 2020
Before pandemic,
33% of consumers Q4 - 2020
58%
used private car Q1 - 2021
52% 52%

42% 41%
39%

3% 3% 2% 3% 4%
1%

Private car Private motorcycle Public transport Taxi / Online transport

Source: OLX Autos Indonesia

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 1. Latest used cars consumers behaviors
Agenda during pandemic

2. Impact of the PPnBM relaxation and

Ramadan season

3. Methodology

8
 There are two major forces impacting the used cars industry:
PPnBM relaxation and Ramadan Season

1 PPnBM (Luxury Tax) Relaxation 2 Ramadan Season

• The regulation impacts 35-45% of used cars • Despite travel restriction, used cars demand grow

transactions and decreases the prices by up to 10% by ~10% during Ramadan season, since Buyers

• The regulation changes the behaviors of used are taking advantage of lower price and needing

cars consumers and dealers safer transportation

Source: OLX Autos Indonesia

9
 1
The PPnBM relaxation is implemented to support the growth
of new cars industry
• New Cars industry had a 45% drop in retail sales in
2020
• To spur growth, Government implemented Luxury
Tax (PPnBM) relaxation, via subsidy, until Dec 2021
• The subsidy is targeted for new cars that are
produced locally with at least 60% of local content
• The regulation is expected to drive growth in the
entire new cars supply chain
• In Mar 2021, retail sales is up by 65% from Feb 2021
Source: OLX Autos Indonesia, Desktop Research
PPnBM Relaxation scheme and criteria
For 1,500 cc cars
• 100% tax subsidy in Mar - May 2021
• 50% tax subsidy in Jun – Aug 2021
• 25% tax subsidy in Sep – Nov 2021
For 1,501 – 2,500 cc cars (4x2)
• 50% tax subsidy in Apr – Aug 2021
• 25% tax subsidy in Sep – Dec 2021
For 1,501 – 2,500 cc cars (4x4)
• 25% tax subsidy in Apr – Aug 2021
• 12.5% tax subsidy in Sep – Dec 2021
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 1
The regulation impacts 35-45% of used cars transactions and
decreases the used cars prices by up to 10%
Share of Used Cars demand by make/model

• The regulation impacts 29 car models, which

55-65% represent ~35-45% of used cars transactions

35-45% • The used cars prices of impacted model

decrease by up to 10%, particularly younger

cars
Non-impacted cars Impacted cars

Source: OLX Autos Indonesia

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 1
The regulation is well understood by the consumers and
dealers
Consumers & Dealers: Have you heard the PPnBM relaxation news recently?

6%
18%
• The regulation is well publicized with more

than 80% of consumers and dealers heard

No the regulation
94%
Yes 82%
• More than 75% of consumers and dealers

understand which cars that are impacted by

the PPnBM relaxation

Consumers Dealers

Source: OLX Autos Indonesia

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 1
PPnBM relaxation changes the behaviors of used cars
consumers and dealers
• Majority of used cars buyers still want to buy used cars due to budget
constraint
Buyers
• Only ~10% of used cars buyers bought new cars after the PPnBM
relaxation is implemented

Individual • Sellers intent to speed up their selling time due to concern of further
Sellers price drop and lower demand

• Dealers experience slower transactions across all models

Dealers • Dealers adapt by reducing their car acquisitions, expanding sales
channels and reducing selling price

Source: OLX Autos Indonesia

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 1
Buyers: ~10% of used cars buyers bought a new car after the
regulation is implemented. Most are still looking for used cars
Buyers: Do you intent to purchase a new Buyers : Have you finally bought
car after the PPnBM relaxation announced? a new car?

22%
• Most buyers are still
42%
looking for used cars
23%
77% due to budget limitation
36%
despite cheaper new

I have not cars

Bought a new car
No Yes Bought a used car

Source: OLX Autos Indonesia

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 1
Individual sellers: Sellers intent to speed up their selling time
due to concern of further price drop and lower demand
Individual Sellers: Does the PPnBM relaxation Individual Sellers: What make you speed up your
speed up your selling decision? selling decision?

Avoid further price drop 69%

47%
60%

No Want to purchase a PPnBM 0%

new car immediately 30%
Yes

53%
40%
Worried that it is difficult to find
a buyer 28%

Sell non impacted cars Sell impacted cars

Source: OLX Autos Indonesia

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 1
Dealers: Dealers experience slower transactions across all
models
Dealers: What is your average sales per week? Dealers: What is the impact of PPnBM relaxation to
your sales?

Lower sales for all

models 13%
-27%
No impact at all
14%

Lower sales for the 52%

3.1 impacted models
2.3 only
Lower sales for the 21%
non-impacted
models only
Q4 '20 Q1 '21

Source: OLX Autos Indonesia

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 1
Dealers: Dealers adapt by reducing car acquisitions,
expanding sales channels and adjusting selling price
Dealers: How do you cope with PPnBM relaxation?

Reduce car acquisition 80%

• Dealers reduce selling prices by up

Expand sales channels 77% to 10%

• 57% of Dealers believe that it will take

Adjust selling price
Ask help from brokers 27%
Provide extra bonus/discounts 27%
75%
6+ months before the industry
return to normal, align with the
expiry of government PPnBM subsidy

Source: OLX Autos Indonesia

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 2
Despite travel restriction, used cars demand grow by ~10%
during Ramadan season
Growth in used cars demand during Ramadan season

25-35% • Ramadan is, typically, a good season for used

cars demand as consumers look to buy cars

6-12%
for homecoming

• To limit Covid-19 cases, the Government put

travel restrictions from April 22 to May 24

• Despite the restriction, used cars demand still

-4-10%

2019 2020 2021 grow by ~10% in 2021

Source: OLX Autos Indonesia, Desktop Research

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 2
The restrictions do not limit demand since Buyers are taking
advantage of lower price and needing safer transportation
Buyers : As the travel restriction announced, do you reduce your intention to purchase a used car?

“The car’s price should be cheaper due to this

12% (travel) restriction and PPnBM regulation”
(Buyer – Greater Jakarta)

No “I need a safer vehicle for my family”

Yes (Buyer – Greater Jakarta)

88% “I need to change my old car to a younger car

before it cost me more problem”
(Buyer – Semarang)

Source: OLX Autos Indonesia

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 1. Latest used cars consumers behaviors
Agenda during pandemic

2. Impact of the PPnBM relaxation and

Ramadan season

3. Methodology

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 Methodology

• We employed multiple approaches such as, in-depth interviews with industry experts, used cars

dealers and consumer surveys conducted throughout the year every quarter

• Specific for the last consumer survey, we asked OLX Car Buyers, Individual Sellers and Dealers. The

survey was conducted between April 11 – May 2, 2021 and in total, 1,193 respondents took the survey

Segment # of respondents

Buyers 658

Individual Sellers 430

Dealers 105

Source: OLX Autos Indonesia

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 Respondents’ profile – Buyers (n = 658)

Gender SES1 City

9% 7%
Lower
Male
51% Middle 27%
Female 42%
Upper 44%
91%
3%
3%
4% 9%
10%
Age Car Ownership
2% <25 yo
8% 9% Do not
25-35 yo 14% 30% have a car
20% 32%
36-45 yo 1 car Greater Jakarta Bandung

46-55 yo Surabaya Semarang

47% 2 cars
38%
55+ yo Medan Yogyakarta
3+ cars Others

1. *SES: Monthly Household Expense (MHE) to support primary needs (such as food, water or electricity bill, education fare,
etc.) where: Lower (MHE = less than IDR 1.25 Mn); Middle (MHE = IDR 1.25 – 4 Mn); Upper (MHE = more than IDR 4 Mn)
Source: OLX Autos Indonesia
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 Respondents’ profile – Individual Sellers (n = 430)

Gender SES1 City

11%
Male
Female 9%
89% 38% 40%

48%
43%
5%
Age 7%
2%
<25 yo 3%
4%
21% 25-35 yo 7%
32%
36-45 yo
46-55 yo Greater Jakarta Surabaya
41%
55+ yo Bandung Yogyakarta
Lower Middle Upper Medan Others

1. *SES: Monthly Household Expense (MHE) to support primary needs (such as food, water or electricity bill, education fare,
etc.) where: Lower (MHE = less than IDR 1.25 Mn); Middle (MHE = IDR 1.25 – 4 Mn); Upper (MHE = more than IDR 4 Mn)
Source: OLX Autos Indonesia
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 Respondents’ profile – Dealers (n = 105)

Gender Inventory City

8%
Male
12%
Female 27%
7%
92% 43%

55% 6%
26%
Age 5%
7% <25 yo 10% 9%
19% 2%
25-35 yo
31% 36-45 yo
46-55 yo Greater Jakarta Bandung
41%
55+ yo <5 Cars 5-10 Cars Surabaya Semarang
10-20 Cars 20+ Cars Medan Others

Source: OLX Autos Indonesia

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