By on September 9, 2011

Carmakers don’t want to be caught napping when the “next China” is at stake. They are setting their sights on Southeast Asia. Currently en vogue: Indonesia. The country with a population of 237 million  has a bullet on the PowerPoints of most major carmakers. Toyota is already there and wants to double down.

Toyota wants to nearly double the capacity of an existing assembly plant in the suburbs of Jakarta  to 200,000 units a year. That’s a healthy number. According to The Nikkei [sub], the factory is “expected to assemble three subcompact models, including a low-priced strategic vehicle under development for that country.”

Toyota currently has 60 percent of the 750,000 units market which is expected to grow beyond 1 million units in the coming years. The competition is hot on their heels. Nissan and Suzuki are expanding. GM wants to build a plant here.

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6 Comments on “The Heat Is On In Indonesia...”

  • avatar

    As I’ve said in TTAC before, Indonesia may have the people, but we don’t have the roads for all the cars that’s going to be bought. We definitely need Eisenhower-style Interstate Highway project. The benefit of such project will be enormous, and will do wonders to the nation’s economy, and will last for decades, that I think it’s worth doing even if we have to borrow money to do it. Too bad the ones in charge here aren’t even thinking about it. Actually, what little infrastructure that we have today is crumbling. Soon we will have tons of cars with nowhere to go.

    China’s car boom is not just because their people’s income is rising, but also because they’ve been preparing for it by investing in road building and other infrastructure for decades.

  • avatar

    You could say the same for India.

    • 0 avatar

      Difference is, Indonesia is made up of a bunch of islands. India is one big chunk of real estate. Not all islands are as heavily populated as Sumatra and Java and building an Interstate would be like building the H1, H2, and H3 in Hawaii. They are Interstates to nowhere.

      • 0 avatar

        Even on separate islands, roads will help a great deal. Kalimantan or Borneo is our largest island and there’s hardly any roads there. And what’s there is so bad even Land Cruisers got stuck. Don’t even talk about Papua, the whole place is a National Geographic Special. Some places are reachable by small airplanes landing on makeshift runway. the gov’t been talking about building a bridge from Java to Sumatra for decades, nothing yet. Trucks form lines for miles to the port waiting for ferries to cross them to Sumatra because there were never enough ferries. Sometimes it takes days before they get a space on a ferry. A bridge (plus roads connecting to that bridge) will do wonders for Sumatra’s development, I’m sure.

        I agree that India would benefit from roads even more. Unfortunately, both countries are democracies. You think democracies are all good, think again. Too much bickering between different interest to get anything of substance done. Still, it’s better than the alternative…

      • 0 avatar

        Maybe the manufacturers see Indonesia more as an exporter of finished goods, like cars, electronics and shoes. Adding more roads would be very costly considering the terrain and would not give the immediate return on investment that Indonesia so desperately needs to improve its social services.

        Foreign investment like car manufacturing would result in an almost immediate improvement of lifestyles for a broad segment of the population. We see this in Northern Mexico, across from where I live in the southern part of California.

        They didn’t add many new roads in Northern Mexico, but they did add a lot of new factories. Employed a lot of people. Changed the living standard immediately. That has an enormous impact on the shopping malls, big box stores and warehouse stores like Wal-Mart on the US-side of the border.

        But that may not hold true for Indonesia since borders are not that easily crossed from the islands. An expansion of ferry-services may be more beneficial for commerce there.

  • avatar

    Toyota is behind in China and India, so they want to ensure their lead in Indonesia.

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