Indonesia Automotive Industry

INDONESIAN AUTOMOTIVE IN BRIEF
• National Automotive industry has developed for more than 30 years.
• Tens of assemblers of various types of Cars and motorcycles have now
existed in the country.
• Also, there are hundreds of component industries producing various
types of components to support assemblers of motor vehicle, as vendor
items and for export market.
• Market for MPV (Multi Purpose Vehicle)  is very strong, making
Indonesia is considered as one of production bases of MPV for domestic
and export markets.
• Automotive industry absorbs large number of labours, using simple to
high technologies, and become pull sector for SMIs development

• With those progress Indonesia has a strong basis in automotive industries

Market and Production
• Regional and global automotive market demand (Source : Jama 2010)
– Dominated by world players that control market ,supply of material and
component, as well as technology.
– From 2006, world automotive market demand tends to decrease; car market in
2008 was only 63,1 million units (growth trends = -1,12 % / year)
– But  Asia and ASEAN demands for car were increased, where in 2008 Asian was
19,4 million units (growth trends = 5,62 % / year) and ASEAN  was 1,77 million
units (growth trends = 8,90 % / year)
– Growth from 2006 up to 2008 : Indonesia = 37,92 % ; Thailand = -5,12 % ;
Malaysia = 5,68 %.
Supply and demand
• During the last 5 years, Indonesia’s market and production for cars and
motorcycle has grown around 7-8% each year.
• For 2010, market demand for cars in Indonesia is predicted to be around 750.000
units, while Motorcycle is predicted  7,4 million units4
• Production of European Premium Sedans was 2.824 in 2009 and predicted will be
around 5000 this year or grew 6,78% / year in the last 5 years
• Sales of European Premium Sedans in 2010 is predicted to be around 6.000 unit,
or grow around 4,84% during the last 5 years
• Export of CBU Unit and CKD Sets as well as Component Pieces this year are
slowing down compared in 2008 though the growth during the last 5 years are still
positive especially in CBU unit (29,52%)
• Imports of CBU Unit in 2010 is also slowing down compared to 2008 though the
growth during the last 5 years are still positive around 15,45%

Production
Production of Cars : Total Work Force : + 380.000
Production of Motor Cycles : Total Work Force : 1.653.600
• 40 Assembling Companies (Work Force : 27.600 people) Avg : 690 People/Company
• 195 Lvl 1 Component Industries Companies (Work Force : 39.375 people) Avg : 202
People/company
• 600 Companies Lvl 2 Component Industries (Work Force : 11.625 people) Avg : 20
People/Company
• + 18.000 Authorized Outlet (Work Force : + 262.500 people) Avg : 15 People/Outlet
• + 90.000 Non Authorized Outlet (Work Force : + 1.312.500 people) Avg : 15
People/Outlet
Policy

• Development of domestic market through tariff
harmonization and taxation.
• Increasing domestic component industry capability.
• Providing incentive for development of R&D.
• Providing fiscal incentive to attract investment in high
technology component industry.
Strategy

• Sector :
• To strengthen production basis commercial vehicle, small
passenger car, and   motor cycle.
• To increase product and manufacturing technology capability
motor vehicle component industries.
• To strengthen industrial structure in all value chain through
development of  automotive clusters.
• To develop interlinkage of supply chain through clusters.
• Technology :
• To develop design engineering and development of automotive
component, full manufacturing of motor cycle.

Eco-CAR Program
• Vehicle with very efficient fuel consumption
• Comply to minimum of standard Euro III
• Very affordable price for majority of people
• Locally manufactured and use very high
local content.