This report is the result of extensive research into the Indonesian automotive industry, covering its dynamics and competitive landscape. It provides insights into the size and forecast for the overall automotive industry, and categories such as passenger vehicles and commercial vehicles, and provides details of products in each category. This report also provides an overview of the leading companies and brands. Using a variety of primary and secondary sources for sizing and forecasting markets including, but not limited to, interviews with automotive manufacturers and dealers, public financial records, historic market data, and user surveys. The next step is the entry of demand- and supply-side data into proprietary models of market segments in order to generate market data and forecasts. Then, the preliminary values in the market model are validated using a number of different procedures. And lastly, the market models are adjusted accordingly.
Despite increasing production costs and higher interest rates, automobile sales in Indonesia grew 10.9% in the first quarter of 2014 against the same period last year. Automobile sales are expected to reach 1.3 million units in 2014, driven by the increasing purchasing power of the expanding middle class. The market is projected to grow at a CAGR of 7.1% over the period 2014–2018, fueled by soaring demand for budget and economically friendly vehicles.
Traditionally, the seven-seat family cars have been popular in Indonesia but small cars are increasingly gaining acceptance and are expected to be the fastest growing category over the forecast period. To overcome traffic problems in urban areas and to save fuel costs, Indonesians are shifting towards small cars. Growing consuming class (middle class) in Indonesia, usually the first-time buyers, would fuel the demand for lower end cars.
Indonesia is expected to surpass Thailand and emerge as the Southeast Asia's largest automotive market in 2014. Thailand's automotive sales are expected to decline in 2014 on the account of political unrest and post electoral uncertainties. The adverse effect of economic turmoil in Thailand has been already evident with Toyota reconsidering its decision to invest up to US$618.1 million in Thailand while other automakers are planning to shift away from Thailand viewing the long-term potential of the Indonesian market. The slump in Thailand is expected to benefit Indonesia in realizing its dream of becoming the Southeast Asia's manufacturing hub. However, inadequate and ageing infrastructure and shortage of power supply could impede the growth of Indonesian automotive industry.
Less than 5% of the country's population of about 240 million own vehicles, reflecting the immense growth potential of the market. The government removed luxury tax in 2013 on cheap cars priced below US$8,800. The move is likely to increase the affordability to the masses and spur the demand to reach 2 million units by 2017.
The government introduced Low Cost Green Car (LCGC) policy in 2013 to further four-wheeled mobility for the masses, and is offering incentives to encourage the production of such cars in a move to make the country a production hub in ASEAN. To qualify for LCGC benefits, a car must have a minimum fuel efficiency of 20 to 22 kilometers per liter and an engine capacity of less than 1,200cc. As a result, the market is increasingly witnessing a large variety of lower-priced compact vehicles. According to survey findings from Daihatsu in 2013, about 5 million Indonesian households will have capacity to purchase a new vehicle by 2020 and with the introduction of LCGC, this purchasing potential is projected to reach to 12 million households. Sales of LCGC totaled 51.2 thousand units in 2013.
Currently, Indonesia exports sedans and sports utility and multi-purpose vehicles to over 70 countries. Driven by increasing demand in Saudi Arabia, Thailand, the Philippines, Malaysia and Japan, automobile exports are expected to increase by 10% in 2014 to reach US$4.9 billion.
The Indonesian automotive industry is highly dominated by Japanese companies with Toyota being the undisputed market leader. Other key players include Daihatsu, Suzuki, Mitsubishi, Honda and Nissan. Toyota's Avanza is the largest selling model in the country with sales standing at 192,146 units in 2012 and the sales of second largest model, Daihatsu's Xenia, is nowhere close to it. Xenia sales totaled 73,418 units. Toyota's sales totaled 434232 units in 2013 while Daihatsu sold 185942 units. This reflects the strong dominance of Toyota in the Indonesian automotive market
Despite increasing production costs and higher interest rates, automobile sales in Indonesia grew 10.9% in the first quarter of 2014 against the same period last year. Automobile sales are expected to reach 1.3 million units in 2014, driven by the increasing purchasing power of the expanding middle class. The market is projected to grow at a CAGR of 7.1% over the period 2014–2018, fueled by soaring demand for budget and economically friendly vehicles.
Traditionally, the seven-seat family cars have been popular in Indonesia but small cars are increasingly gaining acceptance and are expected to be the fastest growing category over the forecast period. To overcome traffic problems in urban areas and to save fuel costs, Indonesians are shifting towards small cars. Growing consuming class (middle class) in Indonesia, usually the first-time buyers, would fuel the demand for lower end cars.
Indonesia is expected to surpass Thailand and emerge as the Southeast Asia's largest automotive market in 2014. Thailand's automotive sales are expected to decline in 2014 on the account of political unrest and post electoral uncertainties. The adverse effect of economic turmoil in Thailand has been already evident with Toyota reconsidering its decision to invest up to US$618.1 million in Thailand while other automakers are planning to shift away from Thailand viewing the long-term potential of the Indonesian market. The slump in Thailand is expected to benefit Indonesia in realizing its dream of becoming the Southeast Asia's manufacturing hub. However, inadequate and ageing infrastructure and shortage of power supply could impede the growth of Indonesian automotive industry.
Less than 5% of the country's population of about 240 million own vehicles, reflecting the immense growth potential of the market. The government removed luxury tax in 2013 on cheap cars priced below US$8,800. The move is likely to increase the affordability to the masses and spur the demand to reach 2 million units by 2017.
The government introduced Low Cost Green Car (LCGC) policy in 2013 to further four-wheeled mobility for the masses, and is offering incentives to encourage the production of such cars in a move to make the country a production hub in ASEAN. To qualify for LCGC benefits, a car must have a minimum fuel efficiency of 20 to 22 kilometers per liter and an engine capacity of less than 1,200cc. As a result, the market is increasingly witnessing a large variety of lower-priced compact vehicles. According to survey findings from Daihatsu in 2013, about 5 million Indonesian households will have capacity to purchase a new vehicle by 2020 and with the introduction of LCGC, this purchasing potential is projected to reach to 12 million households. Sales of LCGC totaled 51.2 thousand units in 2013.
Currently, Indonesia exports sedans and sports utility and multi-purpose vehicles to over 70 countries. Driven by increasing demand in Saudi Arabia, Thailand, the Philippines, Malaysia and Japan, automobile exports are expected to increase by 10% in 2014 to reach US$4.9 billion.
The Indonesian automotive industry is highly dominated by Japanese companies with Toyota being the undisputed market leader. Other key players include Daihatsu, Suzuki, Mitsubishi, Honda and Nissan. Toyota's Avanza is the largest selling model in the country with sales standing at 192,146 units in 2012 and the sales of second largest model, Daihatsu's Xenia, is nowhere close to it. Xenia sales totaled 73,418 units. Toyota's sales totaled 434232 units in 2013 while Daihatsu sold 185942 units. This reflects the strong dominance of Toyota in the Indonesian automotive market
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