Car sales in Indonesia have jumped by 76% in the first half of 2010 to and are expected to reach 700,000 units by the end of the year, the market outgrowing Southeast Asia’s usual auto powerhouse Thailand.

Just how good this news is depends on where you sit. All auto brands have been trying to increase production capacity at their Indonesian plants to meet demand, thrilling automakers. Nissan plans to double capacity at its local factory to 100,000 units and invest another US$20 million in the country. Increased auto sales are obviously a sign of growing wealth and economic activity, especially since a significant portion of that increase is minivans and multi-purpose vehicles.

Others say Indonesia needs major improvements to its road and highway infrastructure to accommodate large numbers of extra vehicles. After all, spending hours in traffic jams doesn’t increase economic activity and is likely to worsen pollution. Auto industry figures say even 700,000 sales represents a shadow of Indonesia’s potential, given its population of 230 million.

New vehicle sales in 2010 have reached 1.18 million already across the region (Indonesia, Thailand, Malaysia, Philippines, Vietnam & Singapore). This should please Japanese automakers, whose brands make up 80% of that total.

source & article: The Jakarta Globe