T

he 22nd Indonesia International Motor Show (IIMS), one of Asia'€™s biggest automobile shows, kicked off on Thursday with the government claiming the country'€™s automotive industry still had great potential for growth.

In his opening speech, Trade Minister Muhammad Lutfi said the automotive sector was important to the national economy given its high added-value.

'€œIndonesia, with its large and continuously growing demography, is fertile ground for technological investments such as automobiles,'€ he said.

While acknowledging its great potential, Lutfi said the automotive manufacturing industry should be moved from the capital, which was now overcrowded.

Vehicle plants with production rates of more than 2 million units per year need to move outside Greater Jakarta, while those with production exceeding 3 million units should relocate outside Java.

Making a comparison, the trade minister said car ownership in Indonesia was still relatively small compared to that in more developed countries like the US, Japan or, even, Thailand.

According to him, there are at least 1,000 cars for every 1,000 people in the US; in Japan, for every 1,000 people there are 582 units; whereas in Thailand, the ratio of people to cars is 1,000 to 179.

'€œIn Indonesia, there are only 37 cars to every 1,000 people,'€ he said.

Lutfi said if car ownership in the country grew at the rate of Thailand'€™s, gridlock would be inevitable.

'€œCongestion in Jakarta, Bandung and other large cities will be four times as bad [as today],'€ he said.

Lutfi, a former Indonesian ambassador to Japan, joked it was '€œhigh time'€ for Indonesia to bring traffic congestion to other countries by exporting locally made cars.

Jakarta has been struggling to avoid total traffic gridlock, which was initially predicted to occur in 2014.

It will soon introduce electronic road pricing on the capital'€™s main roads.

According to Transportation Agency data, Jakarta has 8.4 million vehicles '€” 2.8 million cars and 5.6 million motorcycles '€” while the average speed of vehicles is 15 kilometers per hour.

The agency predicted that 1.2 million new vehicles every year would jam the city'€™s streets while road development was only 0.1 percent annually.

This year, the Association of Indonesian Automotive Manufacturers (Gaikindo) is targeting a domestic sales figure of around 1.2 million to 1.25 million units of vehicles, from the current production capacity of 2 million units per year.

The country is also exporting 200,000 completely built-up (CBU) units and 120,000 completely knocked down (CKD) units.

Gaikindo chairman Sudirman Maman Rusdi said the automotive industry had already produced 878,000 units as of August, up 14 percent from the same period last year.

'€œThis year'€™s IIMS is especially important, as it is staged at a time when the Indonesian automotive industry is on the up. In 2013, the industry recorded its highest volume of sales, exceeding 1.229 million units,'€ Sudirman said.