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Indonesian Government to set a target on Vehicle Production to Reach 2.5 Million Units in 2020

19 July 2017 | Author : Manufakturindo
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This year, the production capacity of vehicles in Indonesia is expected to reach more than 1.2 million units. This amount rose up for about a million, compared to last year's production that stuck in 1.1 million units. This increase will strengthen the Indonesia's position as one of the ASEAN automotive industry power, after Thailand.

 

"The achievement is expected to boost the contribution of the automotive industry sector to the national economic growth," said Minister of Industry of Airlangga, Tuesday (11/7).

 

Furthermore, Airlangga explained that from the 1.1 million unit’s production amount last year, about 200 thousand units of cars are marketed to overseas and the rest is absorbed by domestic market. Therefore, the government asked the national automotive industry to continue to expand the export market in order to create a balance with the needs of the domestic market.

 

2,5 Million Units Target

 

"The government targeting the automotive production to penetrate 2.5 million units by 2020 to compete in the global market," he said. In addition, Airlangga believes that the national automotive industry structure will be deeper due to supported steel industry roadmap with a target capacity of 10 million tons in 2025.

 

The Minister of Industry hopes that the automotive industry in Indonesia can absorb much more raw materials within the country. "The availability of raw materials for the automotive industry, especially steel, resin, synthetic rubber, and aluminum is expected to be met within the country by 2019," he added. 

 

According to Ministry of Industry, in 2016, the contribution of the subsector transportation equipment industry (including the automotive industry) to GDP of non-oil industry sector reached 10.47 percent, or the third largest, after the subsector food and beverage industry by 32.84 percent and sub-Industrial metal goods, computers, electronics, optics, and electrical appliances by 10.71 percent.

 

Airlangga is optimistic that this year, the performance of the domestic automotive industry will be able to grow better in line with Indonesia's product market potential and the positive national economic growth. This is driven by the recovery of the global economy as well as comprehensive structural reforms in the country.



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