Suzuki Indomobil Motor (a joint venture between Suzuki Motor Corporation and the IndoMobil Group) and Astra Daihatsu Motor (a merger of Astra International and Japan's Daihatsu) are both tapping the export market for their low cost green cars (LCGCs). Suzuki Indomobil Motor started exporting the Suzuki Karimun Wagon R to Pakistan in December 2013, while Astra Daihatsu Motor is planning to export two models (Astra Toyota Agya and Astra Daihatsu Ayla) to the Philippines starting from February 2014. Indonesia's Minister of Industry MS Hidayat said that the export of LCGCs to the Philippines will number 1,000 units per month.

Hidayat also stated that the Indonesian government is eager to make Indonesia the global production base for car manufacturing and would like to see all major car producers to establish factories in Indonesia. The main aim of the government is to approach the position of Thailand as the largest car market in Southeast Asia. The government also wants to turn Indonesia into an independent car manufacturing country through delivering completely built units (CBU) of which all components are produced in Indonesia. Currently, many components still need to be imported. This can be a problem in times of sharp rupiah depreciation (against the US dollar) as these imports are paid in US dollars. Hidayat predicts that in the next five years, Indonesia will be able to produce cars of which all components are Indonesian-made.

In 2013, Indonesia's car sales reached a record high of 1.2 million units. In that same year, Indonesia's car exports were still relatively low at 170,907 units. In 2014, total car sales are expected to rise slightly to 1.3 million units, while car exports are estimated to increase by at least 17 percent to 200,000 units.

Indonesia's LCGC program was started in 2013. Through tax incentives the Indonesian government attracted producers that meet the requirements of fuel efficiency targets and aims to make the country the regional hub for LCGCs ahead of the start of the ASEAN Economic Community in 2015 (which will turn the ASEAN region into one single market and production base). The LCGC is also regarded as a solution to limit Indonesia's subsidized fuel consumption. For the government it is important to reduce the import of expensive oil in order to curb the country's current account deficit which is partly to blame for the depreciating rupiah exchange rate in 2013. With a price tag of only about IDR 100 million (USD $8,333), these LCGCs are significantly cheaper. It is claimed that Indonesia's LCGC program has attracted investments worth of USD $6.5 billion.

 Month    Sold Cars 2012    Sold Cars 2013
 January           76,427           96,719
 February           86,486          103,279
 March           87,917           95,996
 April           87,144          102,257
 May           95,541           99,702
 June          101,746          104,278
 July          102,511          112,183
 August           76,445           77,962
 September          102,100          115,974
 October          106,754          112,039
 November          103,703          111,741
 December           89,456           94,069¹
 Total         1,116,230

¹ preliminary figures
Source: Gaikindo

     2008    2009    2010    2011     2012     2013¹     2014²
Indonesia's Car Sales
(number of car units)
 607,805  486,061  764,710  894,164 1,116,230
1,226,199 1,300,000
Indonesia's Exports
(number of car units)
 100,982   56,669   85,769  107,932  173,368  170,907  200,000

¹ preliminary figure
² future forecast
Source: Gaikindo

Further Reading:

Car Sales in Indonesia Expected to Rise in 2014 amid Political Elections
Popular Low Cost Green Car Boosts Indonesian Car Sales in 2013
Gaikindo Targets 10% Car Sales Growth in Indonesia for 2014
Indonesian Automotive Industry: Car Sales Expected to Hit Record in 2013