Minister Hopes Indonesia to Become Production Base for Automotive

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    TEMPO.CO, Jakarta - Industrial Minister Saleh Husin hopes to turn Indonesia into a production base for automotive industry by catching up to its competitor in ASEAN, which is Thailand.

    "Indonesia is able to become the second largest automotive producer in ASEAN after Thailand. We have to be able to overtake because we have a large export and domestic market," said Saleh on Monday, July 6, 2015.

    According to Saleh, Indonesia is attempting to overtake Thailand in production and export of four-wheel vehicles and strengthen national automotive industry's competitiveness.

    Thailand is able to produce around 2.5 million vehicles per year, with 50 percent of them exported, while Indonesia tails behind with production of 1.2 million units per year and is still domestic market-oriented.

    Domestic market potential is supported by the middle class population, where according to AC Nielsen data in 2013, the growth rate of population in middle-class category in ASEAN 2012-2020 is 110.5 percent, while Indonesia reaches 174 percent, the highest among ASEAN countries.

    "This indicates that domestic demands for motor vehicles will keep growing and strengthens our optimism that we can become an exporter and one of the basis for automotive products in ASEAN and the world," said Saleh.

    Automotive industry also plays an important role in providing job fields for millions of workers. Based on the Industry Ministry's data, the automotive sector has absorbed around 1.3 million people.