Together, these forces from China and the USA will try to break the dominating position of Japan in Indonesia's car market. Indonesia is known as the backyard of Japanese car manufacturers and Japanese car brands are indeed the most popular cars in Southeast Asia's largest economy, Toyota being the market leader.

Read also: Overview & Analysis of Indonesia's Automotive Industry & Market

In full-year 2016 a total of 1.06 million cars were sold in Indonesia, rebounding after two years of falling car sales in the domestic market. Monthly car sales figures released by the Indonesian Automotive Industry Association (Gaikindo) show that the rebound continues into 2017 (see table below). Therefore, car sales in Indonesia may touch 1.1 million this year. Considering per capita car ownership is low in Indonesia, there remain plenty of opportunities for further growth in the years ahead. SGMW Motor Indonesia earlier stated that it wants to control 10 percent of the Indonesian car market by 2022, an ambitious target.

SGMW Motor Indonesia (also known as Wuling Motors) is to manufacture the Confero S vehicle at its first plant in Indonesia. This multi-purpose vehicle (MPV) can carry up to seven people. The MPV is, by far, the most popular vehicle in Indonesia. This market is led by the Toyota Avanza and Daihatsu Xenia.

Indonesians love the MPV - often called "people carriers" - because these vehicles are bigger and taller than most other car types. Indonesians need a big car because they tend to have big families and enjoy taking trips with the family (and/or invite some friends). Car manufacturers are aware of high MPV demand in Indonesia and therefore continue to launch new (and improved) models. With functionality in check, manufacturers now particularly focus on improving the design of the MPV to entice Indonesian consumers.

Xu Feiyan, President Director of SGMW Motor Indonesia, said that the construction of the manufacturing facility shows the company's long-term commitment to contribute to growth of the Indonesian economy, particularly in the automotive industry. It is estimated that about 3,000 local workers will be needed at the 60-hectare plant in Cikarang. The factory is designed to be able to produce up to 120,000 vehicles per year. The facility, which required about USD $700 million worth of investment, consists of a manufacturing plant and a supplier park. Constructed had started in August 2015.

Indonesian Car Sales (CBU):

Month Sold Cars
Sold Cars
Sold Cars
Sold Cars
Sold Cars
January   96,718  103,609   94,194   85,002   86,324
February  103,278  111,824   88,740   88,208   95,159
March   95,996  113,067   99,410   94,092  102,336
April  102,257  106,124   81,600   84,770   89,587
May   99,697   96,872   79,375   88,567   93,661
June  104,268  110,614   82,172   91,488
July  112,178   91,334   55,615   61,891
August   77,964   96,652   90,537   96,282
September  115,974  102,572   93,038   92,541
October  112,039  105,222   88,408   92,106
November  111,841   91,327   86,938  100,365
December   97,706   78,802   73,264   86,547
Total 1,229,916
1,208,019 1,013,291 1,061,859


     2009    2010    2011     2012     2013     2014     2015     2016
Car Sales
(car units)
 486,061  764,710  894,164 1,116,230
1,229,916 1,208,019 1,013,291 1,061,859
Car Production
(car units)
    n.a.     n.a.     n.a.      n.a. 1,208,211 1,298,532 1,098,780 1,177,797

Source: Gaikindo

Tuesday's inauguration of the plant was witnessed by Indonesian Vice President Jusuf Kalla, Industrial Minister Airlangga Hartarto, and West Java Governor Ahmad Heryawan. Hartarto added that SGMW Motor Indonesia will also be working with 20 local component manufacturers and 15 international component manufacturers that Wuling brought to Indonesia.

In terms of shareholder composition in the join venture, SAIC Motor Corporation Ltd controls 50 percent, GM controls 44 percent, while Wuling owns the remaining shares.

The Confero S is currently being showcased at the 2017 Jakarta Fair expo that runs between 9 June and 16 July 2017. The price for the basic Confero S vehicle is IDR 130 million (approx. USD $9,775), a competitive price on the Indonesian market.

Wuling Motors Commercial: