The Heat Is On In Indonesia

Bertel Schmitt
by Bertel Schmitt

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.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • MrWhopee MrWhopee on Sep 09, 2011

    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.

  • Advance_92 Advance_92 on Sep 09, 2011

    You could say the same for India.

    • See 2 previous
    • Dodobreeder Dodobreeder on Sep 10, 2011

      @dodobreeder 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.

  • Bd2 Bd2 on Sep 09, 2011

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