Update COVID-19 in Indonesia: 1,542,516 confirmed infections, 41,977 deaths (6 April 2021)
14 April 2021 (closed)
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The government of Indonesia eyes rapid growth of car exports in the two decades ahead. By the year 2035 the government targets to see car shipments from Indonesia rise to 1.5 million vehicles (from around 200,000 exported units in 2016). By that year, exported vehicles should contribute 37.5 percent of total Indonesian car sales.
I Gusti Putu Suryawirawan, Director General of Metal, Machinery, Transportation Equipment & Electronic Industries at the Indonesian Industry Ministry, said car exports from Indonesia are estimated to rise significantly between 2020 and 2025. However, by 2030 shipments should take off even more impressively.
Expectations of rapidly rising car shipments are related to the construction of the USD $3 billion Patimban deep seaport in Subang (West Java), envisaged to become an international seaport with a 7.5 million twenty-foot equivalent units (TEU) capacity. The location of this seaport is convenient for most of Indonesia's car manufacturers (the automotive manufacturing sector of Indonesia is highly concentrated in West Java), hence pushing down logistics costs and improving competitiveness. Japan - one of the biggest investors in Indonesia's car industry - is involved in the construction of the Patimban seaport, controlling a 49 percent stake.
Based on information from the Indonesian Automotive Industry Association (Gaikindo), Indonesia's car exports have increased by an average of 5 percent (y/y) between 2012 and 2016. This is solid growth, albeit coming from a low base. Hence, only around 200,000 vehicles were shipped from Indonesia in full-year 2016, or roughly 20 percent of total car sales in Indonesia. Therefore, it is clear that Indonesia's automotive industry is currently still highly dependent on domestic sales.
Also the low-cost green car (LCGC), which has become a popular choice for Indonesian consumers since its introduction in late-2013, has the potential to become an important export product to emerging markets in the ASEAN region.
In terms of production capacity, Indonesia is more than ready to boost car exports. This year the nation's car manufacturing capacity is estimated to have grown 8.4 percent (y/y) to 2.06 million vehicles, while domestic car demand may only reach 1.1 million units this year. Rising production capacity comes on the back of two new factories owned by Mitsubishi Motors Corp and SAIC General Motors Wuling.
Jongkie Sugiarto, Chairman of Gaikindo, warned however that Indonesia requires much more automotive component manufacturers. Currently, there are only around 800 local companies that produce automotive components, well below 2,500 component suppliers in Thailand (the region's biggest car production hub).
Indonesian Car Sales (CBU):