July 18, 2019 / 7:57 AM / 2 months ago

UPDATE 1-Indonesia's Astra bets on ride-hailing firm Go-Jek as car sales dive

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JAKARTA, July 18 (Reuters) - Astra International, Indonesia’s largest automobile distributor, on Thursday launched a joint venture with Go-Jek to provide cars to the ride-hailing firm.

The move, which comes on the heels of an overall $250 million investment in Go-Jek, is aimed at boosting Astra’s already-strong market dominance, despite a dismal full-year outlook for countrywide car sales.

“The outlook for the country’s overall car sales is between 1.05 million and 1.1 million units for 2019,” Astra President and Director Prijono Sugiarto told reporters, a dive from 1.5 million units sold in 2018.

“This is because the global economy is not so good and the export of CPO (crude palm oil) is low, so it risks impacting our purchasing power,” Sugiarto added.

Astra is 50.1% owned by conglomerate Jardine Cycle & Carriage.

The newly launched “GoFleet”, which comprises “thousands of cars” should help Go-Jek fight back Singapore-based rival Grab, following a new regulation prohibiting individuals from offering car-hailing services.

Launched in 2011, Go-Jek has evolved from ride-sharing to allowing its customers to make online payments and order everything from food to groceries and massage services.

The Indonesian company is currently in the middle of a targeted $3 billion fundraising round, of which Astra contributed $100 million in March, as the ride-hailing firm fights bigger rival Grab for dominance of the region. (Reporting by Cindy Silviana; Editing by Kim Coghill and Sherry Jacob-Phillips)

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