Indonesia Car Production Growth Peak in 2010

PT. Mercedes Benz IndonesiaJAKARTA— Percentage of car production in Indonesia during 2009-2016 period saw the highest increase in 2010 where the total annual production has reached 51.1 per cent of production in 2009. In 2009 the production of cars in Indonesia 464,816 units, reaching 702,508 units in 2010.

In 2010, the production of all categories rose. In Indonesia, car production at that time consisted of six categories— sedan, 4 × 2, 4 × 4, buses, pickups, and trucks. In terms of percentage, of the six categories, the production of 4 × 4 increased the most in 2010 (about 500 percent) to 15,191 units from 3,560 units in 2009. Meanwhile, the other five categories in 2010 averagely rose about 100 percent.

Throughout the 2009-2016 period, car production in Indonesia rose from 2009 to 2014. The increase in production was varied and volatile, namely some 51.1 per cent (2009-2010), 19.3 percent (2010-2011), 25.7 percent (2011-2012), 14.6 percent (2012-2013), 7.8 percent (2013-2014). In 2015, production fell 15.4 percent. The decline in production experienced in some categories (4 × 2, buses, pickups, and trucks. Meanwhile some categories— sedan, 4 × 4, and LCGC— still managed to increase of production. Total annual production returned to make growth of 7.2 percent in 2016.

Of the total number of cars produced in Indonesia, the highest rate occurred in 2014 (1,298,523 units). Peak production rate in 2014 was preceded by a two-year downward trend since 2013. After rising by 25.7 percent in 2011-2012, the percentage of production weakened by 14.6 percent in 2012-2013. This downturn continued in 2013-2014 where production growth amounted to only 7.6 percent.

The increase of car production in Indonesia in 2009-2016 period was driven by the production of environmentally friendly and reasonably priced cars (LCGC). LCGC car production in Indonesia occurred since 2013, preceded by a government policy. In term of production volume, the 4 × 2 category shows consistency. Meanwhile, sedan production had grown convincingly since 2009 to reach the peak in 2014 (61,499 units), before dropping to 29,525 units in 2016.

Some brands that have been developing manufacturing activities to produce cars in Indonesia, among others, include BMW, Daihatsu, Datsun, Hino, Honda, Hyundai, Isuzu, Mercedes-Benz, Mitsubishi Fuso, Nissan, Suzuki and Toyota. With the influx of new investment from China, Wuling is also reported to start production in Indonesia in 2018. (*)