Currently, GM taps the Indonesian automotive industry through its Chevrolet car brand. Its factory in Bekasi (West Java) has a production capacity of 40,000 vehicles per year. In the first nine months of 2013, the company sold 11,400 Chevrolet units in Indonesia. As such, GM only forms a minor player in Indonesia's automotive sector. For comparison, Astra International (Indonesia's largest car producer) sold over 478,000 cars in the same period. But given the large potential in Indonesia, due to its expanding middle class, GM and SAIC are eager to expand its business in Southeast Asia's largest economy. In recent years, car sales in Indonesia have grown sharply and in combination with the currently still low per capita car ownership, there is no end to the growth in sight yet.

The exact business model that will be applied to expand business in Indonesia remains unknown (for example a contract assembly for SAIC or a GM-SAIC joint venture). At the moment, GM and SAIC are still exploring business opportunities in Indonesia.

Overview of Indonesia's Car Industry

Indonesia has been experiencing an unique and important chapter in its car industry history: the country is transforming from a mere production hub into a major car sales market. Low production costs (due to low wages and cheap land) made Indonesia attractive as a production hub, but with GDP per capita reaching over USD $3,500 in 2012, the country's rapidly increasing middle class has turned into a significant consumer force. Domestic car sales reached a record-high level of over 1.1 million car units in 2012, and has recently attracted increased foreign investment in the nation's car industry. Although it is expected that the industry will feel the impact of Indonesia's slowing economic growth as well as the macroeconomic policies that aim for financial stability at the expense of economic growth, Indonesia's car industry still has healthy prospects for the middle and longer term as the country's per capita car ownership is still relatively low, while per capita GDP continues to grow.

Toyota is Indonesia's clear market leader. Through a jointly controlled entity with the Toyota Motor Corporation, Astra International holds the exclusive right to sell Toyota vehicles on the Indonesian market. The country's second most popular car brand is the Daihatsu, which is also distributed by Astra International. As such, the company holds a powerful position in Indonesia's car market. Mitsubishi cars, the country's third most popular car brand, are distributed by Krama Yudha Tiga Berlian Motors.

Indonesian Car Sales Statistics:

 Month    Sold Cars 2012    Sold Cars 2013
 January           76,427           96,718
 February           86,486          103,279
 March           87,917           96,009
 April           87,144          102,262
 May           95,541           99,685
 June          101,746          104,264
 July          102,511          112,180
 August           76,445           77,961
 September          102,100          115,921
 Total          816,317          908,279
    Q3-2012   Q3-2013
   Growth (yoy)
Indonesia's Car Sales
(number of car units)
  816,317   908,279        11.26%
     2008    2009    2010    2011     2012
Indonesia's Car Sales
(number of car units)
 607,805  486,061  764,710  894,164 1,116,230

Source: Gaikindo