JAKARTA (Bloomberg) -- Toyota Motor Corp.'s Indonesian venture said its share of the country's vehicle market may decline as demand outpaces gains in production capacity.

PT Toyota-Astra Motor's market share may drop to 34 percent this year, President Johnny Darmawan told reporters in Jakarta late Saturday. The company accounted for 39 percent of the 318,904 vehicles sold in the country last year, according to the Association of Indonesian Automotive Industries.

Indonesia's central bank on June 7 cut borrowing costs for the 12th time since May last year to help achieve the government's 6.3 percent economic growth target. Lower interest rates have fueled demand for loans to buy cars, and automotive retailer PT Astra International estimates sales may rise to more than 400,000 units this year. “Competitors can enter and eat into our market,” Toyota-Astra's Darmawan said. “I expect market share to drop because all of our products are on waiting list.”

Toyota-Astra, which produces Avanza and Kijang minivans, is 49 percent owned by Toyota and 51 percent by PT Astra International.