emis insight - indonesia automotive sector report

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Automotive

Sector

Indonesia December 2013


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Table of Contents

I. Sector Overview

1. Sector Highlights

2. Economic Importance

3. Sector Forecast

4. CPI and Consumption

5. Employment and Wages

6. Market – Population by Major Cities

7. Government Regulations and Tariffs

8. Investment Risks

II. Automotive Production and Sales

1. Automotive Production Highlights

2. Automotive Production by Type

3. ASEAN Regional Production Data

4. Automotive Sales Highlights

5. Automotive Sales by Type 6. ASEAN Regional Sales Data

7. Foreign Trade

8. Car and Motorcycle Sales by Brand

III. Major Players

1. Market Positioning Overview

2. PT Astra International Tbk (ASII)

3. Indomobil Sukses Internasional Tbk (IMAS)

4. Industry Expansion Indonesia


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I. Sector Overview


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Sector Highlights

Car penetration in Indonesia is estimated at 40 cars per thousand people in a country whose population tops 240 million. Indonesia has a young

demographic profile with 60.8% of the population aged below 35 years as of 2011. People aged 30-34 had the highest average gross income in Indonesia,

at IDR 38.7mn (USD 4,199) in 2011, compared to the national average gross income of IDR 31.5mn (USD 3,422). These factors overcome the negative

effects of inflation, rising interest rates and depreciating rupiah and underpins car sales. Japanese car brands generated over 90% of the sales in 2013 with

the top three car makers being Toyota and Daihatsu (both distributed by local conglomerate Astra) and Mitsubishi.

The automotive sector is one of the most robust industries in Indonesia and the country ranks 15th in world in terms of auto sales. The industry has

enjoyed steady domestic sales growth averaging 15% since 2010 as is projected to continue to grow until the end of the decade. Manufacturers of

both vehicles and components are building new production facilities to meet the burgeoning local and regional demand. The hike in fuel prices did

not repel buyers, but re-directed them towards the low-cost green car (LCGC) segment. The tax incentives that the government provides to LCGC

producers not only make these cars more affordable but they also encourage producers to expand their output and possibly turn Indonesia into a

regional production hub due to low wages and the availability of cheap land.

Indonesia is the largest economy in South East Asia and industry accounts for the largest share of the country's GDP (46.5% of total GDP). The

inflation rate from 2009 to June 2013 was stable ranging between 4.45% and 5.90%, but spiked to 8.1% in July 2013 mainly driven by rising food

and transportation prices, coinciding with peaking demand during the Ramadan. The government raised the subsidised fuel prices in June 2013,

with the price of premium fuel rising by 44% to IDR 6,500, while the price of diesel was increased by 22% to IDR 5,500. The Bank of Indonesia

projects that the inflation rate will return back to normal levels by Q1 2014, but meanwhile it has been steadily raising the base interest to curb it,

thus directly restricting the availability of cheap financing for car loans.

Economic situation

Production

Sales


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Source:

Economic Importance

Economic Importance

World Bank, Bank Indonesia

2008 2009 2010 2011 2012

GDP in current prices (USD bn) 510.2 539.6 709.2 846.3 878.0

GDP in current prices, IDR bn 4,948,688.4 5,606,203.4 6,446,851.9 7,422,781.2 8,241,864.3

GDP in current prices:

Manufacturing of transport

equipment machinery and

apparatus, IDR bn

329,911.7 346,403.0 389,600.1 426,233.7 465,537.4

GDP in constant prices, IDR bn 2,082,456.1 2,178,850.4 2,314,458.8 2,464,676.5 2,618,139.2

GDP in constant prices:

Manufacturing of transport

equipment machinery and

apparatus, IDR bn

177,178.3 172,085.1 189,947.9 202,892.0 216,970.0

GNI per capita, PPP (current

international USD)3.75 3.91 4.18 4.48 4.81

GNI per capita, Atlas method

(current USD) 1,950.0 2,160.0 2,500.0 2,930.0 3,420.0

Inflation, consumer prices (annual

%)9.8 6.4 5.1 5.4 4.3

Current account balance

(% of GDP)0.0 2.0 0.7 0.2 -2.8

Foreign direct investment, Netinflows (BoP, current USD bn)

9.318 4.877 13.771 19.241 19.853


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Source:

Sector Forecast

Comments

Indomobil forecast

Gaikindo forecast

BMI forecast

Gaikindo, Indomobil, BMI

Vehicle sales in Indonesia are expected to grow by 5%-10% to about 1.3

million in 2014, according to a forecast by the Association of Indonesian

Automotive Manufacturers (Gaikindo). The depreciating local currency,

the expected rise in Toyota prices and the anti-inflationary measure in

the form of a rising benchmark interest rate (an obstacle before 65% of

car buyers, who borrow financing from banks) are restrict higher market

growth, a Gaikindo official said. Another significant trend is the state

support for low cost green cars (LCGC), which represented 3% of the car

sales in Jan-Nov 2013 and 15% in November alone. The government will

also indirectly influence the market by offering subsidised fuel. Theprojected spending on this programme is between IDR 190tn and IDR

220tn.

2015 2020 2025

Production of vehicles 1,207,833 1,945,307 3,132,936

Sales of vehicles 1,208.51 1,946,318 3,134,454

Exports of vehicles 179.96 289,827 466.77

Production (IDR bn) 130.451 210.093 338.357

2014f 2015f 2016f 2017f

Production of passenger cars 925,283 1,008,559 1,104,372 1,207,078

Sales pf passenger cars 926,743 1,019,418 1,121,359 1,222,282

Motorcycle production (mn

CBUs)8.03 8.753 9.628 10.687

Motorcycle sales (mn CBUs) 7.938 8.652 9.517 10.564

607,805

486,061

764,710

894,164

1,116,2301,226,199

1,300,000

2008 2009 2010 2011 2012 2013e 2014f


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Source:

CPI and Consumption

Comments

Average monthly expenditure per capita

Inflation rate (2007=100)

Retail sales index (Oct 2000=100)

Statistics Indonesia, Bank Indonesia, CEIC

The inflation rate in the country remained stable fluctuating between

4.45% and 5.90% in the period 2009 to June 2013.

In July 2013, the inflation rate spiked from 5.9% to 8.1% largely driven

by rising food and transportation prices, coinciding with peaking demand

during the Ramadan. In June 2013, the government raised the

subsidised fuel price, with the price of premium fuel increasing going up

by 44% to IDR 6,500, while the price of diesel was increased by 22% to

IDR 5,500. The Bank of Indonesia projects that the inflation rate willreturn back to normal levels by Q1 2014.

110

115

120

125

130

135

140

145

353,421 386,370430,065

494,845

593,664633,269

703,561

1 2 ,

8 4 7

1 3 ,

8 3 3

1 5 ,

7 8 9

1 5 ,

2 8 2

2 5 ,

5 8 1

1 7 ,

9 5 3

2 1 ,

4 0 6

2007 2008 2009 2010 2011 2012 2013

Total Vehicles and repair

0

50

100

150

200

250

300

350

Retail sales index Motor vehicles and spare parts




Source:

Employment and Wages

Auto workforce

Most of the workers in the automotive manufacturing

sector are 'non-skilled' labor and are paid minimum wage.

The average working week is 5.5 days and the majority of

the workers are union members. Most of the plants are

based on the island of Java and located in the suburbs of

the capital Jakarta.

In 2013, the minimum wage was increased nationwide by

19% to 48.5% depending on the province (Jakarta saw

some of the larger increases). The minimum wage for

auto workers was raised by some 29% to USD 220 per

month. The unions are lobbying for a 20% wage increase

in 2014.

The launch of the LCGC initiative is expected to create

70,000 jobs – 30,000 in auto manufacturing and 40,000 in

support activities.

Ministry of Manpower and Transmigration, Indomobil

Type of plant # Of plants Workers per plant Total workers

Assembly 20 950 19,000

Authorized outlet 11,000 7 77,000

Non-authorized

outlet

33,000 8 231,500

Lvl 1 component

industries150 280 42,000

Lvl 2 component

industries350 32 11,000

* Based on2010 - this number has risen with new plants and Industry

expansion




Source:

Comments

Market – Population by Major Cities

The above information is based on a census conducted in May 2010. When assessing the potential market, making assumptions based on the city

population can be misleading as large segments of the population live outside of city limits, representing a lucrative market for automobiles.

Half of the Indonesian population is under 30 years of age. Government projections show an increase in per capita income of USD 10,000 by 2020.

Population by City and Province

Statistics Indonesia

Main cities City population Province population Admin units / Province Island Area (sq.km.)

Jakarta 9,607,787 9,607,787 Provinsi DKI Jakarta Java 664.01

Surabaya 2,765,487 37,476,757 Provinsi Jawa Timur Java East 47,799.75

Bandung 2,394,873 43,053,732 Provinsi Jawa Barat Java West 35,377.76

Bekasi 2,334,871 2,630,401 Kabupaten Bekasi Java 1,484.37

Medan 2,097,610 12,982,204 Provinsi Sumatera Utara Sumatera North 72,981.23

Tangerang 1,798,601 1,798,601 Provinsi Banten Java 184.00

Depok 1,738,570 1,738,570 Kota Depok Java 200.29

Semarang

1,555,984

32,382,657

Provinsi Jawa Tengah

Java Central

32,800.69

Palembang 1,455,284 7,450,394 Provinsi Sumatera Selatan Sumatera South 91,592.43

Makassar 1,338,663 46,717.48 Provinsi Sulawesi Selatan Sulawesi South 8,034,776

Bogor 950,334 950.334 Kota Bogor Java 21.56

Padang 833,562 4,846,909 Provinsi Sumatera Barat Sumatera West 42,012.89




Source:

Government Regulations and Tariffs

Import duties and luxury tax, % LCGC regulations July 2013

The government has provided tax incentives on luxury goods

sales for low cost and environmentally friendly automobiles in

the low cost green car (LCGC) and low carbon emission

(LCE) programs. The tax incentive provision is outlined in

government regulation 41 that was enacted on May 23,

2013.With the new regulation, automobile manufacturers can

obtain luxury goods sales tax incentive of 25% to 100% of

the value that should be paid. (Astra is targeting 10,000 cars

per month).

For a car that uses gasoline, the engine size must range

between 980 cc and 1,200 cc. For cars that use diesel, the

engine must not be larger than 1,500 cc.

The car must have an ability to run for 20 kilometers for each

liter of fuel it consumes (gasoline and diesel).

The car must use RON92 gasoline or CN 51 diesel, which

are high-octane fuels. The off-road sale price of the car must

be capped at a maximum of IDR 100mn.

The government also requires vehicles to come with

standard safety features, such as airbags. Firstly, the certified results of fuel testing and visual

evidence that the branding, logo and model reflect Indonesia.

Secondly,The companies must then attach the proof of theirrealized investment, including the plan for using local

components. Thirdly, companies must attach a letter thatspecifies the selling price of the car. Lastly, the terms andconditions must be verified by an independent surveyor.

Ministry of Finance

Import duty LuxurytaxCBU CKD IKD

2010 2011 2010 2011 2010 2011 2011

Sedan

CC




.

…

Source:

Investment Risks

In 2014, Indonesia will be holding presidential elections. The incumbent

president, Susilo Bambang Yudhoyono, will be completing his second

five-year term. His administration initiated many reforms in Indonesia

and worked to create a more investor friendly environment for the local

industry. There is no guarantee that a new administration will continue

these policies. The 1st round of the presidential elections will be held in

July.

In July 2013, Bank Indonesia raised interest rates to 6.5% and set theovernight deposit facility rate (FASBI) at 4.75%. In July, the inflation

rate spiked from 5.9% to 8.1% and the bank took aggressive measures

to reduce the inflation rate.

In 2013, the minimum wage was increased between 19.1% and 48.86%depending on the region, with the sharpest hikes registered in Jakarta

and East Kalimantan. The local unions are lobbying for a 20% increase

in 2014, a demand which may be granted considering the election year.

Indonesia's foreign-exchange reserves fell to a two-year low in June2013 as Bank Indonesia intervened to support the rupiah, addingpressure on the Central Bank to raise interest rates.

The country's reserves fell to USD 98.1 billion in June 2013 from USD105.15 billion in May at their lowest level since January 2011.

The currency has fallen about 4% this year, breaching the 10,000 leveland hitting its weakest point since September 2009.

The Presidential elections of 2014, high inflation

rate, rising labor costs, declining foreign reserves

and currency depreciation remain some of the

biggest risks facing Indonesia in 2014.

Political Risks Foreign Exchange Reserves

Inflation Rising Labor Costs

Bank Indonesia




II. Automotive Production and Sales


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Automotive Production Highlights

Importance

The automotive sector is one of the most robust industries in Indonesia. The industry has enjoyed steady domestic sales

growth averaging 15% since 2010 as is projected to continue to grow until the end of the decade. Manufacturers of both

vehicles and components are building new production facilities to meet the burgeoning local and regional demand. The hike in

fuel prices did not repel buyers, but re-directed them towards the LCGC segment. However, industry growth is affected by the

increase of the base interest rate that makes car loans less attractive.

Annual car sales will double to 2 million units by 2018 and that the proportion of exports will rise from about 10% of total

production at the moment to 20-30% in 2018, according to a projection of Budi Darmadi, a senior industry ministry official.

LCGC todrive marketupwards

The introduction of the low cost green cars (LCGC) in September 2013 is the most significant new development in Indonesia's

automotive industry in terms of both production and sales. The tax incentives that the government provides to LCGC producers

not only makes these cars more affordable but also encourages producers to expand their output.

Newinvestmentsand jobs

The government support for the LCGC subsector is expected to lure new investments and provide new jobs. According to

Coordinating Minister for Economic Affairs, Hatta Rajasa, the initiative has attracted USD 3bn in the automotive industry and

another USD 3.5bn in the production of auto components. This expansion will also create 70,000 jobs – some 30,000 in

manufacturing and 40,000 in sales, marketing, autoshops and other related subsectors. The market structure will not change

dramatically, as the market leaders Toyota and Daihatsu have already started manufacturing LCGC models prior to the launch

of the initiative, noted LMC Automotive analyst Ammar Master.


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Source:

Automotive Production by Type

Automotive production by type

Gaikindo

2008 2009 2010 2011 2012Jan-Nov

2013Share in2012 (%)

share in Jan-Nov 2013 (%)

Sedan

CC


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Source:

ASEAN Regional Production Data

Vehicle production

Motorcycle and scooter production in Indonesia

Motorcycle and scooter production

ASEAN

Motor vehicles Passenger Commercial

Indonesia Jan-Oct 2013 1,001,682

2012 1,065,557 743,501 322,056

MalaysiaJan-Oct 2013 494,417

2012 569,620 509,621 59,999

Philippines Jan-Oct 2013 66,566

2012 75,413 26,340 49,073

ThailandJan-Oct 2013 2,115,375

2012 2,453,717 957,623 1,496,094

Vietnam Jan-Oct 2013

73,653

2012 73,673 41,488 32,185

TotalJan-Oct 2013 3,751,693

2012 4,237,980 2,278,573 1,959,407

2012 Jan-Oct 2013

Indonesia 7,079,721 6,539,594

Malaysia 543,088 463,452

Philippines 588,292 610,985

Thailand

2,606,161

1,910,287

Total 10,817,262 9,524,318

6,264,2655,884,021

7,395,3908,006,293

7,079,7216,539,594

2008 2009 2010 2011 2012 Jan-Oct 2013


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Automotive Sales Highlights

Salespotential

Indonesia has a young demographic profile with 60.8% of the population aged below 35 years as of 2011. People aged 30-34

had the highest average gross income in Indonesia, IDR 38.7mn (USD 4,199) in 2011, compared to the national average gross

income of IDR 31.5mn (USD 3,422). High earners in this age group will likely buy their first cars.

In 2012, Indonesia's central bank tried to limit the growth of car sales by introducing a new rule that raised the required

minimum down payment for the purchase of automobiles from 10% to 25% of the price for commercial cars, and to 30% for

passenger cars. This move slowed down car sales as around 65% of car purchases in Indonesia are made with the help of

loans.

Astradominance

Japanese car brands accounted for over 90% of the sales in 2013. Toyota Motor Corp. dominates both in terms of numbers

and as market presence among car dealerships. Currently, together with Daihatsu, it runs 450 dealers and has a 54% share of

the market. Another major global player, General Motors, has only 34 dealers and a 0.7% market share on the Indonesian

market. Toyota and Daihatsu vehicles are sold by joint ventures between Indonesian conglomerate PT Astra International and

the two Japanese car makers. Mitsubishi, the country's third most popular car brand, is distributed by Krama Yudha Tiga

Berlian Motors.

LCGC impact

The affordable price cap on LCGC cars is allowing a growing number of Indonesians to become car owners. Although analysts

are optimistic that Indonesia's middle class will expand, its growth is currently hampered by high inflation, rise in subsidised fuel

prices, depreciating local currency and soaring prices of imported goods. The sector is now underpinned by the sales of the six

available LCGC car models and their number will increase to nine in 2014.


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Source:

Automotive Sales by Type

Automotive production by type

Gaikindo

2008 2009 2010 2011 2012 Jan-Nov2013

share in2012 (%)

share in Jan-Nov 2013 (%)

Sedan

CC


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Source:

ASEAN Regional Sales Data

Vehicle sales

Motorcycle and scooter sales in Indonesia

Motorcycle and scooter sales

ASEAN

Motor vehicles

Passenger

Commercial

BruneiJan-Oct 2013 15,694

2012 18,634 17,854 780

IndonesiaJan-Oct 2013 1,020,389

2012 1,116,212 780,767 335,445

MalaysiaJan-Oct 2013 543,048

2012 627,753 552,189 75,564

PhilippinesJan-Oct 2013 148,181

2012 156,654 48,328 108,326

SingaporeJan-Oct 2013 27,954

2012 37,247 32,724 4,523

ThailandJan-Oct 2013 1,123,268

2012

1,436,335

694,234

742,101

VietnamJan-Oct 2013 77,723

2012 80,453 43,692 36,761

TotalJan-Oct 2013 2,956,257

2012 3,473,288 2,169,788 1,303,500

2012 Jan-Oct 2013

Indonesia 7,141,586 6,530,079

Malaysia 537,753 460,766

Philippines 702,599 608,199

Singapore 9,923 9,634

Thailand

2,130,067

1,738,996

Total 10,521,928 9,347,674

6,280,7995,881,777

7,398,6448,043,535

7,141,5866,530,079

2008 2009 2010 2011 2012 Jan-Oct 2013


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Source:

Foreign Trade

Exports CBU, units

Exports components, units

Exports CKD, units

Imports CBU, units

Gaikindo

100,982

56,669

85,796

107,932

173,368155,711

2008 2009 2010 2011 2012 Jan-Nov2013

103,710

53,140 55,624

83,709

100,122 97,615

2008 2009 2010 2011 2012 Jan-Nov2013

311,066 232,648 353,950

48,170,428

55,504,758

12,081,911

2008 2009 2010 2011 2012 Jan-Nov2013

72,646

32,678

76,520 76,173

125,873

146,765

2008 2009 2010 2011 2012 Jan-Nov2013


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Source:

Car and Motorcycle Sales by Brand

Car sales by brand Motorcycle sales by brand

Jakarta Post, Indonesian Motorcycle Industry Association

264

1,809

29,016

56,341

86,817

92,324

145,371

148,967

171,195

400,026

333

2,925

33,165

67,143

69,320

99,081

148,918

126,577

162,742

406,026

188

3,045

28,746

56,137

45,416

80,967

134,416

94,569

139,544

311,136

Peugeot

UD Trucks

Isuzu

Nissan

Honda

Others

Mitsubishi

Suzuki

Daihatsu

Toyota

2011 2012 Jan-Nov 2013

n/a

9,344

123,431

418,940

2,423,854

4,088,888

382

13,994

95,108

493,095

3,136,073

4,273,888

Kanzen

TVS

Kawasaki

Suzuki

Yamaha

Honda

2011 2012


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III. Major Players


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Source:

Market Positioning Overview

Operating inIndonesia

The auto industry in Indonesia is dominated by large conglomerates that produce: CBUs (Completely Built Units), CKDs (Completely

Knocked Down Kits) and components/parts. These combines own or joint venture: assembly plants, parts manufacturers, logistic

companies, dealerships, car rental agencies and financing facilities for end-users. Japanese companies have been doing business in

Indonesia for decades and understand the complexities on the ground and it is no surprise that they hold around 90% of the domestic

car and truck sales in Indonesia.

ASTRA

PT Astra International Tbk is the largest and oldest auto conglomerate in Indonesia and accounts for 50-53% of all auto sales in the

country. Astra holds the exclusive distribution rights to Toyota (Indonesia's largest selling brand), Peugeot, Daihatsu, BMW, Isuzu, and

Nissan Diesel as well as the exclusive manufacturing and distribution rights for Honda motorcycles. The company is controlled by

Singapore-listed Jardine Cycle & Carriage Ltd.

Indombil

PT Indomobil Sukses Internasional Tbk is the second largest automotive retailer in the country behind Astra. Its primary business

includes vehicle sales distribution, after-sales service and vehicle-ownership financing. In December 2012, Singapore-based

investment holding company Gallant Venture Ltd. bought a 52% stake in Indomobil Sukses for USD 809.3mn to tap growth in

Southeast Asia's largest economy.

Company annual reports


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Highlights

Source:

PT Astra International Tbk (ASII)

Financial performance, IDR bn

PT Astra International Tbk is the largest and oldest

automotive conglomerate in Indonesia. The company

was established in 1957 as a garage-based trading

company in Jakarta. After 55 years in operation, Astra

has developed into one of the largest national

companies which is supported by 185,580 employees

in 170 companies, including subsidiaries, associates,

and jointly controlled entities.

In 1990, Astra listed its shares on the Indonesia Stock

Exchange. The market capitalization of Astra at the

end of 2012 was IDR 307.7 trillion. Astra operates in

six business segments: Automotive, Financial

Services, Heavy Equipment and Mining, Agribusiness,

Infrastructure and Logistics.

PT Toyota-Astra Motor (TAM) is the sole agent for

sales in Indonesia of all vehicles carrying the Toyotabrand and Daihatsu, Isuzu UD Trucks, Peugeot, BMW,

and Lexus.

Astra operates assembly plants, parts factories,

dealerships and finance units and dominates the

Indonesian auto market with over 50% of all national

sales.

Company data

97,064 98,526

129,991

162,564

188,053

9 ,

1 9 1

1 0 ,

0 4 0

1 4 ,

3 6 6

2 1 ,

3 4 8

2 2 ,

4 6 0

2008 2009 2010 2011 2012

Revenues Net Profit


24/26



Highlights

Source:

Indomobil Sukses Internasional Tbk (IMAS)

Financial performance, IDR bn

PT Indomobil Sukses Internasional Tbk is anintegrated automotive business group, implementing aone-stop service concept with a number ofsubsidiaries being in the forefront of the Indonesianautomotive industry. The company was established in1976 as PT Indomobil Investment Corporation andin1997 merged with PT Indomulti Inti Industri Tbk andchanged its name to PT Indomobil Sukses

Internasional Tbk. The primary business line of the Indomobil and its

subsidiaries encompass brand holding sole agent,vehicle sales distribution, after sales service, vehicleownership financing, spare part distribution underIndoParts brand, vehicle assembly, automotiveparts/component manufacturing, car rental services,and other related supporting services.

The company manages well-known brands ofinternational reputation, namely: Audi, Foton, Hino,

Kalmar, Mack Trucks, Manitou, Nissan, Renault,Renault Trucks, Suzuki, Volkswagen, VolvoConstruction Equipment and Volvo Trucks.

On 7 June 2012, the Indomobil executed a stock split;splitting the nominal value from IDR 500.00 per sharebecame IDR 250.00 per share. Stock split ratio was1:2.

Company data

8,197

6,940

10,935

15,775

19,781

2 3

1 1

5 3 7

1 ,

0 6 6

8 8 5

2008 2009 2010 2011 2012

Revenues Net Profit


25/26



.

…

Source:

Industry Expansion Indonesia

Daihatsu Motor, one of Japan’s biggest car makers,announced its plans to expand its car enginemanufacturing plant in Indonesia. The firm willextend its production line for passenger car enginesat its Astra Daihatsu Motor Indonesian (ADM)subsidiary where the annual production capacity isestimated at 200,000 engines. The expansion is anattempt to further boost Daihatsu’s operations inIndonesia, its key international business location.The firm’s move follows recent expansion plans byrivals including Toyota Motor and Suzuki. ADM,which is 61.75% owned by Japan’s Daihatsu Motor,31.87% by Astra International and 6.38% by Toyota

Tsusho Corporation, currently employs 11,000workers at its Karawang manufacturing plant locatedabout 75 km east of Jakarta. Some of ADM’s brandsinclude Sirion, Terios and Xenia.

GM Launched their new Chevrolet Spin MPV duringan official launch of the General Motors plant inBekasi, on the outskirts of Jakarta on 19 February2013. In June, GM sold 1,294 Spin vans, poweringthe company to sell a total of 1,761 cars that month.While still small, the volume was respectablecompared to the company’s annual volume of 5,277cars last year.

The GM plant, which suspended operations in 2005,will have potential capacity to produce 40,000 Spinvans a year .Indonesian consumers prefer simpleno-frill vans, and the Spin competes against similarlypackaged and priced cars such as the Toyota

Avanza and Nissan Livina.

GM began shipping some of its Indonesia-madeSpin cars to Thailand this month and expects to startexporting them to the Philippines next month.

Suzuki Motor Corp is ready to make a USD1 billion investment for the development ofvehicles and automotive componentsfactory in Bekasi, West Java. The factory

will have a capacity of 150,000 units peryear and will manufacture low cost carsand green cars.

The factory’s construction process 25%complete. Indomobil is the sole agent ofseveral automotive brands, such asSuzuki, Nissan, Hino, and others.

Tata Motors India plans to make

Indonesia a hub to export vehicles to

Southeast Asia.

Over the next two months, the

company plans to open as many as

seven dealerships and increase that

number to 15 by March. Tata Motors

expects to sell enough vehicles in

Indonesia in three to four years to

justify starting an assembly line.

Indonesia along with Brazil, Russia, India, South Africaand China, has become one of the hottest emergingmarkets for car makers.

The McKinsey Global Institute said an additional 90million people will join Indonesia’s consumer class by2030. By then the country could overtake Britain as theseventh-largest economy, according to a Reuters reportin early July.

Daihatsu JV with Astra India’s Tata Motors Enters Indonesia

GM Launches new MPV Suzuki Invests USD $1 Billion in new factory

Reuters – Jakarta Globe – Jakarta Post


26/26

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About EMIS Insight

EMIS Insight is a unit of EMIS that produces proprietary strategic research and analysis. The service features market overviews, industry trend analysis, legislation

and profiles of the leading sector companies provided by locally-based analysts.

About EMIS

Founded in 1994, EMIS (formerly known as ISI Emerging Markets) was acquired by Euromoney Institutional Investor PLC in 1999. EMIS works from over 15 offices

around the world to deliver electronic information products, by subscription, to institutional customers globally. EMIS provides hard-to-get information covering more

than 100 emerging markets. Its flagship products are EMIS Intelligence and EMIS Professional.

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