Number I | September 2016 Number V | March 2017
More articles available at : www . kemlu . go . id / chicago
Trade & Investment Bulletin
Automotive Sector : Bright Future for Car Sales in Indonesia ?
Passenger car sales in Indonesia are estimated to rise 11.5 percent per year in the 2017-2021 periods due to Indonesia ' s expanding middle class . This conclusion based on the research that was conducted by London-based BMI Research . Meanwhile , business consulting firm Frost and Sullivan sees Indonesian car sales rise by 3 % to 4 % ( y / y ) to 1.11 million vehicles in 2017 due to the popular low-cost green cars and multipurpose vehicles .
Indonesian automotive market will grow 3 % to 4 % in 2017 to approximately 1.1 million vehicles . The number of vehicles in Indonesia is about 80 units per 1,000 people . As a function of its promising demographics and the continued availability of relatively inexpensive labor and land , the country has been hotly tipped to transform into a globally competitive automotive manufacturing hub equipped to meet rising demand from local consumers as well as those in similarly-developing regional markets .
BMI Research predicts that Indonesian households with an annual income of between USD $ 10,000 and $ 25,000 will form 38.4 percent of Indonesia ' s total population in 2021 , from 23.2 percent at the start of 2017 . Those households that earn an annual USD $ 5,000 - $ 10,000 will form 23.2 percent of the total Indonesian population by 2021 , down significantly from 41.4 percent in 2017 . The abovementioned figures imply that , generally , Indonesians ' purchasing power will strengthen considerably over the next couple of years amid expectation of accelerating economic growth .
This should then translate into rising car sales in Southeast Asia ' s largest economy where per capita car ownership is still very low . Besides economic growth and the expanding middle class , other factors that are considered to boost car sales in Indonesia in the next couple of years are rising investment in infrastructure development ( including various toll roads ) as well as the stable rupiah exchange rate . These findings originate from a survey that was conducted by Frost and Sullivan at the start of 2017 .
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EDITOR ’ S NOTE
Dear Readers ,
Indonesia targets to become the largest car manufacturer and exporter in the ASEAN region on the long term , surpassing Thailand . In that context , the Indonesian government prepared a tax allowance and tax holiday in order to attract foreign investment , specifically investment in the manufacturing of car components and spare parts . It will require the development of a domestic car component manufacturing industry in order to become the largest regional force in the automotive industry .
To boost foreign investment in energy and mineral resources , The Investment Coordinating Board has launched a three-hour service for obtaining nine licenses connected to energy and mineral resources .
Automotive Sector : Bright Future for Car Sales in Indonesia ? 1
Minister Targets Maritime Sector to Contribute 25 Percent by 2027 3
Indonesia-US Launches Marine Conservation Program 3
Trade Ministry Eases Company Registration , Drops the Requirement of Business License Renewal 4
Three-hour License Service for Energy Sector Launched 4
More Companies Eligible for Simpler Customs Clearance Processes 5 Indonesia Balance of Trade 6
Indonesia Seeks ‘ backup ’ of US Investment : BKPM 7
Accelerated Construction Program Launched for 18 Industrial Estates 7
Trade fairs , Expos , & Exhibitions in Indonesia 8 �
For more detail information please contact : Economics Affairs - Consulate General of the Republic of Indonesia 211 W . Wacker Drive # 8 Chicago , Illinois 60606 Phone : 312.920.1880 Fax : 312.920.1881 Email : economy @ indonesiachicago . org Website : www . kemlu . go . id / Chicago
Number V / March 2017 | Trade & Investment Bulletin 1