An example shows the strong influence of the rupiah-US dollar exchange rate on the price of Indonesian cars. When the low-cost green car (LCGC) was introduced on the Indonesian market in September 2013, the price of a Toyota Agya (a popular LCGC) was set in the range of IDR 97 - 120 million with the average exchange rate of about IDR 11,200 per US dollar in September 2013. Currently, however, the same car model is sold at a price range of IDR 110 - 132 million as the rupiah is now trading at IDR 13,711 per US dollar. The rupiah depreciated 22.4 percent against the greenback between September 2013 and November 2015, hence contributing to the average selling price of a Toyota Agya rising by 12 percent over the same period, despite the fact that government regulations require the LCGC to consist for (at least) 85 percent of locally-manufactured components (this regulation was one of the requirements for car manufacturers in order to obtain tax incentives for the manufacturing of the LCGC in Indonesia).

Raw materials that are imported from abroad for the automotive industry include automotive steel, resin, and aluminum. Such imports are needed as the domestic upstream manufacturing industry in Indonesia is still underdeveloped.

Fortunately, there are some positive developments. In mid-2014, Indonesia's largest steel producer Krakatau Steel formed a joint venture (named Krakatau Nippon Steel Sumikin) with Nippon Steel & Sumitomo Metal Corporation (NSSMC) to build a USD $400 million automotive flat steel factory in West Java. Production capacity of the new plant, which is expected to become operational in 2017, is designed to reach 480 thousand tons per year (state-controlled Krakatau Steel has a 20 percent stake in this project).

Indonesian Car Sales (CBU):

 Month    Sold Cars 2012    Sold Cars 2013    Sold Cars 2014    Sold Cars 2015
 January           76,427           96,718          103,609           94,194
 February           86,486          103,278          111,824           88,740
 March           87,917           95,996          113,067           99,411
 April           87,144          102,257          106,124           81,600
 May           95,541           99,697           96,872           79,375
 June          101,746          104,268          110,614           82,172
 July          102,511          112,178           91,334           55,615
 August           76,445           77,964           96,652           90,538
 September          102,100          115,974          102,572           93,038
 October          106,754          112,039          105,222           88,325
 November          103,703          111,841           91,327
 December           89,456           97,706           78,802
 Total         1,116,230
        1,208,019          853,008


     2008    2009    2010    2011     2012     2013     2014
Indonesian Car Sales
(number of car units)
 607,805  486,061  764,710  894,164 1,116,230
1,229,916 1,208,019
Indonesian Exports
(number of car units)
 100,982   56,669   85,769  107,932  173,368  170,907  202,273

Source: Gaikindo

Indonesian Car Exports

Currently, Toyota Motor Manufacturing Indonesia (TMMIN) and affiliated Astra Daihatsu Motor (ADM) are Indonesia's largest exporters of completely built up (CBU) vehicles. In the first eight months of 2015, shipments of Toyota vehicles stood at 122,000 units, up 25 percent from exports in the same period last year. However, Indonesia is still a small player in terms of worldwide car exports. This year, TMMIN targets to see 175,000 Toyota units (CBU) exported abroad. Two new markets that the company tries to tap are North Africa and Oceania (especially Australia).

Based on the latest data from the Indonesian Automotive Industry Association (Gaikindo), Indonesia exported a total of 163,828 cars (CBU) in the first nine months of 2015 (and imported 64,873 units over the same time). Total installed domestic car production capacity stands at 2 million units (per year).

Meanwhile, Mitsubishi and Daihatsu are the best brands in terms of customer satisfaction in Indonesia (followed by Datsun on third position) according to the latest Sales Satisfaction Index compiled by JD Power.

Further Reading:

Overview and Analysis of Indonesia's Automotive Industry


Donald Haromunthe |

Wonder how is the progress of the planned //USD $400 million automotive flat steel factory in West Java// today. It's been almost one and a half year.