Indonesia aims to fulfill Australia’s car demand by 2017
With an ever increasing middle class, introduction of tax rebates, political stability and sound macro- economic condition, the Indonesian car industry is on the threshold to see resounding growth and expansion. Further opportunity for domestic automotive industry to develop will be initiated as the ASEAN economic community kicks off next year.
Capacity of Indonesian automotive industry has seen dramatic increase due to added investment in this sector. In the three years preceding 2013, $6.5 billion in the form of investment has been pumped into the country’s auto industry while workforce has increased from 715,000 to 1.32 million strong.
Indonesia’s automotive industry production today has increased to 2 million units annually. Now, the government is optimistic of the industry’s progress in the future which has resulted in over 1500 factories producing components and spares to spring up in the region in support of the auto industry.
Indonesia, which ranks second in the region after Thailand (current annual production capacity at 2.5 million units), is expected to be a production base for many international auto makers who see opportunity in the country’s expanding auto sector.
Indonesia is also getting ready to meet Australia’s car demand by 2017, as there will not be a single car maker who will have a manufacturing base in the continent. As such, all cars will be imported from neighbouring countries. With Thailand going through a period of political instability, time is in favour of Indonesia. Australia has a demand for about 1 million new cars annually.
Indonesia expects car sales in 2014 to touch 1.31 million units taking it well on its way to being a leading automobile market in the region. The country exported a total of 170,907 CBUs, 105,380 CKDs and 12.3 million car components thus generating export revenue to the tune of $4.4 billion in the last year with an aim to reach $4.8 million in 2014.
Major car makers around the world already have a production base in Indonesia, and those who dont, are looking forward to get a footing in Indonesia. Below are a few images from the previous Indonesian International Motor Show.