I Gusti Putu Suryawirawan, Director General of Metal, Machinery, Transportation Equipment & Electronic Industries at the Indonesian Industry Ministry, said car exports from Indonesia are estimated to rise significantly between 2020 and 2025. However, by 2030 shipments should take off even more impressively.

Expectations of rapidly rising car shipments are related to the construction of the USD $3 billion Patimban deep seaport in Subang (West Java), envisaged to become an international seaport with a 7.5 million twenty-foot equivalent units (TEU) capacity. The location of this seaport is convenient for most of Indonesia's car manufacturers (the automotive manufacturing sector of Indonesia is highly concentrated in West Java), hence pushing down logistics costs and improving competitiveness. Japan - one of the biggest investors in Indonesia's car industry - is involved in the construction of the Patimban seaport, controlling a 49 percent stake.

Based on information from the Indonesian Automotive Industry Association (Gaikindo), Indonesia's car exports have increased by an average of 5 percent (y/y) between 2012 and 2016. This is solid growth, albeit coming from a low base. Hence, only around 200,000 vehicles were shipped from Indonesia in full-year 2016, or roughly 20 percent of total car sales in Indonesia. Therefore, it is clear that Indonesia's automotive industry is currently still highly dependent on domestic sales.

Also the low-cost green car (LCGC), which has become a popular choice for Indonesian consumers since its introduction in late-2013, has the potential to become an important export product to emerging markets in the ASEAN region.

In terms of production capacity, Indonesia is more than ready to boost car exports. This year the nation's car manufacturing capacity is estimated to have grown 8.4 percent (y/y) to 2.06 million vehicles, while domestic car demand may only reach 1.1 million units this year. Rising production capacity comes on the back of two new factories owned by Mitsubishi Motors Corp and SAIC General Motors Wuling.

Read more: Overview of Indonesia's Automotive Manufacturing Industry

Jongkie Sugiarto, Chairman of Gaikindo, warned however that Indonesia requires much more automotive component manufacturers. Currently, there are only around 800 local companies that produce automotive components, well below 2,500 component suppliers in Thailand (the region's biggest car production hub).

Indonesian Car Sales (CBU):

Month Sold Cars
   2013
Sold Cars
   2014
Sold Cars
   2015
Sold Cars
   2016
Sold Cars
   2017
January   96,718  103,609   94,194   85,002   86,365
February  103,278  111,824   88,740   88,208   95,246
March   95,996  113,067   99,410   94,092  102,431
April  102,257  106,124   81,600   84,770   89,787
May   99,697   96,872   79,375   88,567   94,258
June  104,268  110,614   82,172   91,488   66,550
July  112,178   91,334   55,615   61,891   85,363
August   77,964   96,652   90,537   96,282   96,461
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

 

     2011     2012     2013     2014     2015     2016
Car Sales
(car units)
 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. 1,208,211 1,298,532 1,098,780 1,177,797

Source: Gaikindo

Discuss