Automotive industry in Indonesia

The automotive industry in Indonesia plays an important role to the economic growth of the nation, contributing 10.16 per cent of the GDP.^[1] Indonesia automotive product exports is currently higher in value than their imports.^[2] In 2017, Indonesia is the 17th largest passenger vehicle producer in the world and the 5th largest passenger vehicle producer in Asia, producing 0.98 million vehicles.^[3]

Most of the vehicles built in Indonesia are from foreign brands, notably Japanese, and produced in the country through a joint venture plant with a local partner or a fully owned plant. While full manufacturing with a high percentage of local components in the country is usually preferred by manufacturers and encouraged by the government, several plants in the country also conducted a CKD assembly. CBU imports of new cars in the country is also allowed since 1999 with considerably light import tariffs, although it is discouraged by the government.

Indonesia predominantly produces mini or compact MPVs (52 per cent of total production), SUVs and light pickup trucks under one ton. In 2019, a total 26 per cent of its production output was exported. Around 7.2 per cent of total automobile sales in Indonesia consists of imported vehicles, notably from Thailand, Japan, India, and to lesser extent, South Korea.

Most automobile manufacturers in Indonesia (including passenger car manufacturers and commercial truck manufacturers) are a member of the non-governmental Association of Indonesia Automotive Industries (Gabungan Industri Kendaraan Bermotor Indonesia, GAIKINDO).