Industry Minister Airlangga Hartarto says several investors are committed to investing US$900 million in the automotive industry.

“Investors from Asia and Europe have expressed their commitment,” Airlangga said in Jakarta on Tuesday as quoted by kompas.com. He, however, declined to reveal the details of the investment, including the names of their companies.

“About 50 percent of their products will be exported, while 50 others will be for the domestic market.”

Investors in the automotive industry are confident in Indonesia, particularly because Indonesia is a competent producer of chemicals, glasses and tires needed by the industry, Airlangga said.

The minister stressed the importance of investment in manufacturing industries, including in the automotive sector, because such industries employed a large number of workers and their products could reduce Indonesia’s dependency on exports.

Indonesia exported 346,000 vehicles in 2018,  264,000 of which were completely built up (CBU), while 82,000 others were completely knocked down (CKD). The total value of vehicles exports stood at US$4 billion, plus $2.6 billion from component exports.

“[After the entry of new investors], Indonesia as a manufacturing industry country is close to Mexico and India,” Airlangga added.

He expressed the hope that Indonesia and Australia would soon sign a comprehensive economic partnership agreement (IA-CEPA) because it would open a wider market for the Indonesian automotive industry.

Airlangga said he used to tell his Australian counterpart that Indonesia was eyeing the Australian market for its automotive products after the signing of an IA CEPA.

Indonesia aims to export 100,000 vehicles this year, 95 percent of which are CBU. (bbn)

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