The rivalry between China and Japan over gaining influence in overseas markets will soon move to a new battleground: Indonesian streets.

Despite being relatively minor players in the global automobile industry, Chinese carmakers have been gearing up to invest in Southeast Asia’s largest economy to pave their way to grab slices of the local auto market, which has long been dominated by Japanese brands such as Toyota, Honda and Daihatsu.

Earlier this week, PT SAIC-General Motors-Wuling (SGMW) Motor Indonesia, also known as Wuling Motors, launched the operation of its first local production facility in Indonesia.

With a US$700 million investment, the facility, located in Cikarang, West Java, is designed to produce 8,000 units of the Wuling Confero S by year-end.

The low-cost car, with a price tag of between Rp 135 million (US$10,110) and Rp 165 million, will heat up competition in the low-end multipurpose vehicles (MPV) market against popular brands such as the Toyota Avanza, the Daihatsu Xenia and the Honda Mobilio.

Last year, another Chinese player, PT Sokonindo Automobile, a subsidiary of a joint venture between the Chinese Dongfeng Motor Group and the Chongqing Sokon Motor Group, entered the Indonesian market with the operation of a factory in Cikande, Banten.

The company produces pickup trucks under the Super Cab brand and has planned to market its sport utility vehicles (SUV) starting in 2018.

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