Current affairs

How big is Indonesia's car sales market?

Indonesia's domestic automotive market potential

In the period from January to March, before the implementation of the PSBB (Large-Scale Social Restrictions) due to the corona pandemic, the total number of vehicles shipped from January to March stood at 260,804 units, down 15.9% compared to the same period last year, but in April, after the implementation of the PSBB, the total number of vehicles shipped was 7,871 units, down 90.7% compared to the same month last year, and the target number of vehicles shipped in 2020 was lowered from 1.08 million to 600,000.

The projected GDP growth rates for Southeast Asia in 2020 are 6.8% for Cambodia, 6.7% for Myanmar, 6.5% for Vietnam, 6.1% for the Philippines, 5.8% for Laos, 5.1% for Indonesia, 4.5% for Malaysia, and 2.7% for Thailand, so it's faster to count Indonesia from the bottom up, and it's often touted as a "huge potential market. I think it's not surprising that people are asking the question, "What do you think?

However, an easy indicator of the potential of Indonesia's domestic auto market is the fact that Jakarta, with 9.9 million people (only 3.7% of Indonesia's total population of 269 million), accounts for about 20% of the country's auto shipments, and when multiplied by the forecast of a demographic dividend that will last until 2030, when the working-age population is more than twice that of the dependent population, the potential buyers outside of Jakarta are very large.

In particular, the purchasing potential of areas outside of Jakarta on the island of Java, where 60% of the total population is said to be concentrated, is considered to be very high.

Population of Jabodetabek

    • Jakarta:9.900,000 people
    • Bogor:5.800,000 people
    • Depok:6.700,000 people
    • Tangerang:5.800,000 people
    • Bekasi:4.500,000 people

Total 32,700,000 people

In Indonesia, the purchase of cars and motorcycles has stronger asset-building implications than in Japan, and the demand for them is currently decreasing due to the reduced opportunities to go out under the PSBB and a sense of uncertainty about the future, and used car prices are falling due to an increase in the sale of cars as a means to raise money for companies and individuals. However, in the sense before the Corona disaster, the price of a new mass-market car dropped by 10% in the first year and then dropped by 5% thereafter.

If it continues to flow into the used car market at this rate without being scrapped, the roads in town will be saturated with cars sooner or later, but as mentioned above, we can see that there are plenty of places other than Jakarta and other islands to catch them.

I have also bought a used car in Indonesia four times, but the Jeep CJ-7 (made in 1980) I bought in Jakarta in 2007 had a brake and radiator break down while running, and almost caused a serious accident on Rasuna Said Street in Kuningan, so you need to be very careful about older models and submerged cars sold in years when flood damage was heavy.

The potential competitiveness of automotive exports

The Philippines already has more than 100 million people, Vietnam has more than 90 million people, and Myanmar has more than 60 million people. Therefore, if Indonesia's fragile export competitiveness, which is around 300,000 units a year compared to Thailand, which exports more than 1 million units a year, is enhanced, Indonesia's automobile shipments could increase dramatically.

I have visited Thailand many times including my student trip, and I was impressed with many pickup trucks with "TOYOTA" or "ISUZU" written on the back of the cargo bed, compared to many MPV vehicles in Indonesia.

As a result, pickup trucks account for nearly 50% of Thailand's exports, and nearly 60% of Indonesia's exports are to Asia, while Thailand's exports are well-distributed not only to Asia but also to Australia, the Middle East, and Europe.

Fortunately, the demand for MPVs, one of the strengths of Indonesia's automobile manufacturing system, has tended to increase in recent years in Asia and Australia, and given the geographical advantage of being closer to Australia than to Thailand, there is room to promote MPV exports based on the reduction of logistics costs, even though our relationship is prone to political conflicts such as territorial sea disputes and the execution of Australian drug offenders in Indonesia.

It is said that Indonesia's current annual vehicle production capacity is 2.2 million units, and with the future industrialization of the automotive industry into xEVs, the country is aiming to make it an export base by upgrading the production of internal combustion engines (ICEs), and to produce 4 million units and export 1.5 million units by 2035, but the productivity at the production site is 20% lower than in Thailand, and the benefits of producing vehicles in Indonesia are low.

As part of the promotion of "Making Indonesia 4.0", which is the guiding principle of Indonesia's national priorities, it is necessary to raise the gross profit margin (marginal profit margin) by developing highly skilled human resources and lowering material costs through local procurement of material components, and to promote the approach of pursuing profits in both downstream (material procurement side) and upstream (finished products side) in order to add high value to the domestic industry.


情報共有 1

The sharing of visible results leads to a common recognition of the problems, but if there are people who are troubled because the scarcity of information is diminished by the increasing sharing, the political power to increase the position by monopolizing useful information is at work.

インドネシアのスタバの店員にありがたい人生の教訓を教わった件 2

When you order your usual iced coffee at your regular Starbucks, a familiar clerk usually talks to you in a friendly and familiar way, like "You came at an unusual time today," or "Is your usual iced coffee okay today?

宗教によって異なる「死んだらどうなる」の考え方 3

Both Christianity and Islam are religions derived from Judaism and believe in the one and only God, Jesus Christ (God Himself) or Allah, respectively.

株価操作なんてインドネシア株では当たり前 4

Stock prices fluctuate with sell and buy orders, and if you get a lot of sell orders and a lot of buy orders, the other investors will follow suit with "me too" and the stock will go up.

心臓に毛が生えたインドネシア人のずうずうしい転職活動を応援してみた 5

Since many Indonesians can't maintain mental stability without revealing a secret story to someone else.

日系企業のインドネシアでの存在意義 6

If Japan's population continues to decline at the current rate, domestic demand will continue to shrink, and if this happens, it is inevitable that domestic companies that find it difficult to survive in the Japanese domestic market alone will look for ways to make a living in overseas markets.

チャンスはあるが勝てる分野が 7

After living in Indonesia, talking to people on my own, and gradually understanding the local situation, I realized that starting a business in Indonesia is surprisingly difficult. The reason for the difficulty is the high shipping costs and tariffs, the competition from local companies, and the high running costs of IMTA and DPKK.

インドネシアのシステムインテグレーション業界 8

The other day, I had the opportunity to exchange opinions with JETRO (Japan External Trade Organization) about IT investment by Indonesian SMEs, and they raised an important issue related to the existence value of system integrators, such as "How can we explain the cost benefits of system investment?

肉体と精神と心と魂 9

Speaking of "Body and Soul," it's the debut song of SPEED, a member of the LDP's House of Councillors, Eriko Imai, who was unofficially appointed as parliamentary secretary of the Cabinet Office following yesterday's cabinet reshuffle, and the name of a long-established Indonesian women's fashion brand.

ジャカルタのラーメン市場 10

I came to Indonesia for the first time in October 1997. I didn't understand Indonesian, my job was hard, the people around me were unreasonable, and there was a time when I wanted to go back to Japan for a while.

ブランド力、技術力、資金力の3要素 11

After the Jakarta riots of 1998, when the rupiah plummeted and domestic companies with foreign dollar-denominated debt were struggling to pay interest, I was looking for a new business in Indonesia that would allow me to earn foreign currency.

日本とインドネシアの間でのタイムマシン経営が通じなくなっている件 12

I think that Yoshinoya overcame the frame of Japanese food and became Indonesian soul food. I am happy to see the scene where Japanese food culture is accepted by Indonesian people.

不景気の歴史 13

Since I came to Indonesia, I have seen the economic recession several times, but because of the spread of the new coronavirus this time, the economy will definitely go into recession, and in a few years' time it may be called corona shock or corona recession.

日本のバブル経済崩壊後とインドネシアの通貨危機後 14

When I entered university in 1991, at the end of the bubble economy, land and stock prices were exploding, Mitsubishi Estate had bought the Rockefeller Center Building, a symbol of America, and the women of the one-length body-con (like the Bubbly Dance of Tomigaoka High School's dance club) were dancing at Juliana Tokyo in the waterfront bay area, waving their fans.

内需と外需の自国経済に及ぼす影響 15

The situation in Japan is that even if public works investment is made, the money stays in the savings of companies and individuals, and domestic consumption does not increase, while the situation in Indonesia is that even if domestic consumption increases, the ratio of imported consumer materials is high, and domestic assets are flowing out to foreign countries.

2019年の総選挙を前にインドネシア政治史のおさらい 16

As the campaign (Kampanye) for next year's presidential election (Pemilu Pilpres Pileg Indonesia 2019) is lifted, it has been decided that the order in which the ballot papers will be printed will be No. 1 for the incumbent President Jokowi and Vice President Mahuru candidate pair and No. 2 for President Prabowo and Vice President Sandiagauno candidate pair.

インドネシアの国土と風土が生み出す産地特有のコーヒー 17

Located in the coffee belt between the Tropic of Cancer and the Tropic of Cancer, Indonesia is a country suitable for coffee cultivation, and during the 300 years of Dutch colonial rule that followed the advance of the East India Company in 1602, Arabica coffee was brought to the country and cultivation began in the plateau region with a favorable climate.

-Current affairs