Volkswagen Cancels Investment Plan

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  • Logo Volkswagen. REUTERS/Fabian Bimmer/Files

    Logo Volkswagen. REUTERS/Fabian Bimmer/Files

    TEMPO.CO, Jakarta - The Ministry of Industry is yet to be informed regarding Volkswagen's decision to cancel its investment plan in Indonesia. The European carmaker prefers Thailand as their investment destination.

    Minister of Industry M.S Hidayat, said that he has not received information regarding the change of plan. "I have not received the official notification yet. I will check with the Directorate General of High Technology Industries first," he said yesterday.

    Hidayat mentioned previously that Volkswagen had shown their determination to invest in Indonesia. The company has even deployed research teams around Java to study the market potential. They are also aware that the automotive industry in Indonesia is currently dominated by Japanese brands. "They have studied and calculated Indonesia's market potential thoroughly," he said.

    Agus Tjahajana, Director General of International Industry Cooperation for the Ministry of Industry, said that he is not surprised by Volkswagen's decision to cancel its investment in Indonesia. "Volkswagen has been procrastinating. First they said they wanted to invest in Malaysia, then Indonesia, and now finally Thailand," he said.

    The delay was considered normal because Volkswagen's market share in Indonesia is not significant. Similar with other European carmakers, Volkswagen produces more sedan-type vehicles rather than multi-purpose vehicles (MPV), which captures the largest market share in Indonesia.