Market Divergence

In terms of market size, Indonesia is the largest car market in Southeast Asia and the ASEAN region, controlling about one third of total annual car sales in ASEAN, followed by Thailand in the second position. Indonesia not only has a large population (258 million), but is also characterized by having a rapidly growing middle class. Together, these two factors create strong consumer strength in the automotive industry. The government is determined to turn Indonesia into a global production center for car manufacturing and wants to see large car manufacturers set up factories in Indonesia. Indonesia is determined to replace Thailand as the largest car production center in Southeast Asia and the ASEAN region. In the long run, the government wants to turn Indonesia into an independent car manufacturing country that manufactures car units with all components manufactured in Indonesia.