Booming Indonesia automobile market to attract more investments...

Booming Indonesia automobile market to attract more investments in 2010



Indonesia's automobile market is expected to have a strong new year ahead. It is now the third-largest car market in Southeast Asia after Thailand, where an estimated 620,000 cars were sold, and Malaysia, with some 485,000 cars sold in 2008. Increased demand could see sales reach 1.3 million cars a year by 2010. Currently, less than 1 in 35 Indonesians owns a car, compared with 1 in 14 Thais and 1 in 7 Malaysians, suggesting potential for even more growth. This has attracted car manufacturers across the globe to map out investment plans to penetrate the local market.


Thus far, legal ambiguity, poor infrastructure and a lack of tax incentives have been blamed for declining foreign investment in the sector, but still it remains a key pillar of the economy with investments totaling more than US$7 billion and generating employment of over 300,000. At this point, international players control 90% of the market. Like most markets in the region, Japanese manufacturers have the majority share of sales. Toyota led the market with sales in October 2009 which rose by 38% to 11,310 units for a market share of 36.2%. Mitsubishi is in second place with a market share of 15%, followed by Suzuki on 10.7%.


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