Automotive industry in Indonesia
Indonesia predominantly produces mini or compact MPVs (52 per cent of total production), SUVs and light pickup trucks under one ton.
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 and China.
As the result, a sedan of any size became a luxury-type vehicle for most consumers while minibuses became more popular, even when at the time, despite its natural practicality, tended to be much less comfortable to drive or to ride in.
[11] As the result, unlike its neighbouring countries in Southeast Asia that prefers mostly compact sedans, Indonesian consumers are predominantly buying three-row MPVs.
[13][14] The first motor vehicle to arrive in Indonesia is reported to have been a German Hildebrand & Wolfmüller two-cylinder motorcycle, brought in by Briton John C Potter who was a machinist at the Oemboel Sugar Factory in Probolinggo, East Java.
Beginning in 1980, new rules were also enacted to inhibit the sprawl of brands, with the government limiting local assembly to 71 models of 42 different makes.
The initial rules required a low price, set lower for villagers, a fuel efficiency of at least 20 km/L (56 mpg‑imp; 47 mpg‑US), and at least 60 per cent domestic content.
At the same year, A.H. Budi, the founder of Nasmoco Toyota dealership network in Central Java bought a Toyopet Tiara from an importer in Jakarta.
[35] In Indonesia, the import, marketing, distribution, and after sales service rights of foreign brands are usually held by firms called ATPMs (Agen Tunggal Pemegang Merek, "sole trademark-holding agent").
In the case of special-bodied vehicles, such as the angkots offered by many body builders (karoseri, from Dutch: carrosserie), ATPMs also have relationships with specific companies and often sell their designs through their own showrooms.
[45] As a response to the vehicle import ban, PT Prospect Motor began local assembly of Honda automobiles in Sunter, North Jakarta.
HPM integrated Honda's Indonesian automobile businesses, which was previously conducted by four separate companies ranging across vehicle assembly, engine and component manufacturing, and wholesale distribution.
[47] The history of Mercedes-Benz in Indonesia began back in 1894, when The Susuhunan of Surakarta bought a Benz-model Phaeton (2000cc, 1 cylinder, 5 hp, for eight people).
[50] Mitsubishi, through PT Krama Yudha Tiga Berlian Motors (KTB) has a long presence in Indonesia, but their first true hit was the Colt T120.
The Kijang, developed from the Philippine market Tamaraw Revo of 1976, has spawned an entire range of vehicles and is now built in a number of Asian countries including India.
[37] The success of the Kijang was helpful for TAM as the Crown, Mark II, Land Cruiser, and Corona GL were all struggling in the market place in the first half of the 1980s.
[59] The Land Cruiser dominated the "Jeep" category until the early 1980s, when lighter and more economical competitors began taking away its market share.
[59] Unable to compete with the smaller offerings from Suzuki and Daihatsu, Toyota chose to not further increase the local content levels of the Land Cruiser and had withdrawn it from the Indonesian market by 1986.
[61] Volkswagen and their local partner PT Garuda Mataram was a major player until the mid-1970s but sales dropped precipitously in the latter half of the decade.
The resulting company was called PT German Motor Manufacturing, with Garuda Mataram retaining the Volkswagen distribution rights.
[62] In or just before 1971 Indonesia's Army Strategic Command (Kostrad) took over the local Volkswagen operations as part of a trend of direct government involvement in vehicle manufacturing (and industry in general).
After having been requisitioned by the Netherlands East Indies government in 1941, on 9 March 1942 all machines and equipment was destroyed to avoid it falling into the hands of the approaching Japanese.
The government-run operations did not take good care of the plant and 60 per cent of the run-down assets were sold to PT Astra Motor (who, coincidentally, had gotten their start by being allowed to import 800 Chevrolet trucks in 1967) in 1969.
Udatimex/Udatin has generally handled Holdens, while Garuda Diesel/Garmak has sold Chevrolets, Opels, and the short-lived Morina national Basic Transportation Vehicle project.
While the Gemini Diesel remained popular with taxi operators, with passenger car sales slowing down Udatimex shut their doors in 1991, and regular imports of Holdens came to an end.
Volvo automobiles have been regularly imported to Indonesia since 1971, when Liem Sioe Liong's PT Central Sole Agency gained the concession.
[76] By 1975, industrial policy dictated that the cars be assembled locally and Liem responded by creating a joint venture called PT Salim Jaya Motor, operated by his son Albert.
[77] The Salim Group still imports Volvo trucks, buses, and construction equipment as of 2017, through a company called PT Indotruck Utama.
Indonesia imposes luxury goods tax (Indonesian: Pajak Penjualan atas Barang Mewah (PPnBM)) based on engine displacement and body type.
Automobile manufacturing facilities in Indonesia is currently focused in the western part of Java, mainly in the Jakarta–Cikampek Toll Road corridor in Bekasi and Karawang, where few industrial estates are located there.
