Jakarta, Indonesia: The Indonesian Automotive Industry Association (Gaikindo) has raised its target for Indonesia’s car exports (completely built up units, or CBU) to 220,000 vehicles in 2016.

This figure shows that the association is aiming to see a six percent year on year increase in car exports from the 207,691 units last year. Gaikindo chairman Jongkie Sugiarto said the global economy has started to stabilise and this should have a positive effect on Indonesia’s car shipments.

Despite the optimism, Indonesia’s car exports fell 17.9 percent year on year to 73,524 units in the January-May 2016 period. The previous year figure was 89,554 units. This weaker showing could be attributed to delay in exports of the new releases of the Toyota Fortuner and the Kijang Innova—both manufactured by Toyota Motor Manufacturing Indonesia.

The biggest export destination for Indonesian cars is the Asean region. However, the country still lags behind Thailand and Malaysia for car exports. These neighbouring countries export more than 500,000 vehicles each annually.

Mr Sugiarto commented that Indonesia’s car export performance can improve if domestic manufacturers boost the production of sport utility vehicles (SUVs) and sedans. Both vehicle types have a strong foreign demand. Currently, Indonesia mainly produces multiple-purpose vehicles (MPVs). The association chairman also noted that a government luxury goods tax cut on cars would also drive up exports. The country is looking to become the largest car manufacturer and exporter in Asean. The government has made moves in that direction, including investments in the manufacturing of car components and spares.

APMEN Sept 2016, News