Why Indonesia’s automotive industry is booming

Indonesia is emerging as one of the most dynamic automotive markets in ASEAN, transforming from a traditionally import-reliant country into a regional powerhouse for manufacturing, exports, and innovation. According to the Association of Indonesia Automotive Industries (GAIKINDO), vehicle production exceeded 1.4 million units in 2023, while domestic sales remained robust at over 1 million units annually, making Indonesia the largest automotive consumer market in Southeast Asia. Several factors are fueling this momentum:

Rising Domestic Demand

With a population of more than 270 million and a rapidly expanding middle class, Indonesia is experiencing a steady rise in vehicle ownership. Penetration remains lower compared to Thailand and Malaysia, meaning growth potential is far from saturated. Demand is particularly strong in second-tier cities where infrastructure development and rising incomes are driving new consumer markets.

Manufacturing Hub for ASEAN

Indonesia has successfully attracted leading global players such as Toyota, Honda, Daihatsu, Mitsubishi, Hyundai, and more recently, Chinese EV manufacturers like Wuling and BYD. The government’s tax incentives, industrial policies, and EV infrastructure investment are accelerating both traditional automotive and electric vehicle production. According to the Indonesian Ministry of Industry, the automotive sector accounts for 10% of the country’s manufacturing GDP, highlighting its strategic role in the economy.

EV and Green Transition

Indonesia holds some of the world’s largest nickel reserves, a critical resource for EV battery production. This gives the country a unique advantage as automakers and battery producers from Japan, South Korea, and China invest heavily in the EV ecosystem. The government’s EV roadmap aims for 2.5 million EVs produced locally by 2035, positioning Indonesia as a global hub in the electric mobility transition.

Export Growth

Once heavily reliant on imports, Indonesia has rapidly grown into a key automotive exporter. Today, vehicles made in Indonesia are shipped to markets including the Philippines, Vietnam, Africa, and the Middle East. In 2023, automotive exports surpassed USD 13 billion, reinforcing Indonesia’s rising competitiveness in the global supply chain.

Why Cikarang is the Perfect Meeting Point

At the center of this transformation lies Cikarang, a manufacturing powerhouse in West Java, just east of Jakarta.

■Strategic Location: Cikarang is home to one of Southeast Asia’s largest industrial estates, with seamless connectivity to Jakarta, major ports, and airports.

■Industrial Powerhouse: Leading OEMs such as Toyota, Mitsubishi, Suzuki, and Daihatsu operate plants here, supported by an extensive network of tier-1 and tier-2 suppliers spanning plastics, electronics, and logistics.

■Cross-Industry Synergies: Beyond automotive, Cikarang hosts companies in steel, plastics, electronics, and advanced manufacturing, creating fertile ground for innovation and supply chain collaboration.

■Proven International Base: Thousands of Japanese, Korean, Chinese, and ASEAN manufacturers are concentrated here, making it the largest decision-making hub in Indonesia’s manufacturing sector.

Why Cikarang is the Perfect Meeting Point

Located in West Java, Cikarang is the epicenter of Indonesia’s manufacturing corridor:

■Strategic Location: Just east of Jakarta, with excellent access to ports and airports.

■Industrial Powerhouse: Home to OEM plants of Toyota, Mitsubishi, Suzuki, and Daihatsu, supported by tier-1 suppliers.

■Cross-Industry Synergies: A strong ecosystem spanning steel, plastics, electronics, and logistics.

■International Base: Thousands of Japanese, Korean, Chinese, and ASEAN firms concentrated in one hub.

The ASEAN Advanced Automotive Manufacturing Summit

Organized by Ringier Trade Media Ltd., the ASEAN Advanced Automotive Manufacturing Summit positions Cikarang as both a strategic location and a symbolic hub for regional collaboration.

The Summit will:

■Gather OEMs, suppliers, and policymakers at the heart of Indonesia’s automotive growth.

■Showcase flexible production, EV solutions, and intelligent automation.

■Strengthen ASEAN’s industrial integration and foster new supply chain partnerships.