Sales of new cars may be on the decline in Indonesia, but that doesn’t mean that people aren’t buying cars – they are, but are taking the second-hand approach. According to a report by the Jakarta Post, the used car market is blossoming, and the numbers are growing quickly.

It seems that consumers in the republic are opting for used cars not only because they are cheaper, but because many of the vehicles coming into the market are still relatively new – at around three- to seven-years in age – and in good condition, making them very viable options to explore.

According to data from the Association of Indonesian Automotive Manufacturers (Gaikindo), retail sales of new cars in the country amounted to 499,573 vehicles in the first half of 2019, a drop of 11% compared to the 561,680 units managed in the same period last year. Retail sales of new cars in May-June dropped 30% year-on-year from 93,837 to 65,657 units.

Meanwhile, sales of second-hand cars have continued to grow. “Monthly sales of used cars can reach 300,000 cars, which is quite high,” said Johnny Widodo, the CEO of online marketplace BeliMobilGue.

The report adds that with the Jakarta administration expanding the odd-even traffic policy that is in place next month and planning to limit vehicle age to a maximum 10 years by 2025, the second-hand car market is set to gain even more traction.

“Many people sell their cars after [driving them] three to seven years,” said Johnny. After the vehicle age regulation comes into play, he expects that more people will sell their cars sooner. “Used car sales could grow between 10 and 30% a year by 2023,” he stated. He added that the expanded odd-even policy in Jakarta could boost used car sales further, the change in regulation enabling a number of buyers to own more than one car.

He added that from a business perspective, the opportunities in the second-hand car market were promising, because the sector had no dominant players. “Indonesia’s used car market is extremely fragmented. Many dealers run their business individually,” he said.

Statistics Indonesia (BPS) records show that an estimated 16 million cars were on roads across the country in 2017, with both new and used car markets currently dominated by multi-purpose vehicles (MPV). This is reflected by Gaikindo data, which shows that 11 out of the 15 top-selling vehicle models in the first half of 2018 were MPVs.