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Indonesia Automotive Industry 2025

Automotive & Electric Vehicles Industry in Indonesia

Indonesia is ASEAN's largest automotive market producing 1.3 million vehicles annually. With aggressive EV adoption targets and USD 6 billion in annual FDI, the country is transforming into a regional electric vehicle manufacturing hub supported by abundant nickel resources and strategic government incentives.

1.3M

Vehicles Produced/Year

USD 6B

Annual FDI

7.5%

Annual Growth Rate

#2

ASEAN Producer
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Why Invest in Indonesia's Automotive Industry?

Indonesia offers a complete automotive ecosystem with strong domestic demand, strategic location, and government support for electric vehicle transformation.

Massive Domestic Market

With 280 million people and growing middle class, Indonesia has the largest automotive market in Southeast Asia with 1+ million vehicles sold annually.

EV Revolution

Government targets 2 million electric motorcycles and 400,000 electric cars by 2030 with comprehensive tax incentives and infrastructure support.

Battery Hub Potential

Indonesia controls 22% of global nickel reserves, positioning it as a potential global battery production center for electric vehicles.

Explore Investment Opportunities

Indonesia Automotive Market Overview

Indonesia's automotive industry is experiencing rapid transformation, driven by domestic consumption growth, export expansion, and the electric vehicle revolution.

Production: 1.3 Million Units (2024)

2nd largest automotive producer in ASEAN

Market Size: USD 28 Billion

Growing at 7.5% CAGR through 2030

Export Hub: 300,000+ Units Exported

Strategic gateway to ASEAN & global markets

Indonesia Automotive Manufacturing
ASEAN Leader

Indonesia's Electric Vehicle Revolution

Aggressive government targets and incentives driving EV adoption and manufacturing

Government EV Targets 2030

Electric Motorcycles 2 Million Units
75% Target
Electric Cars 400,000 Units
60% Target
Electric Buses & Trucks 50,000 Units
45% Target
Total Investment: USD 35 billion committed to EV ecosystem development

EV Investment Incentives

  • Corporate Tax Holiday

    5-20 years tax holiday for EV manufacturers with minimum USD 500M investment

  • Import Duty Exemption

    0% import duty on EV production machinery and components

  • VAT Incentive

    10% VAT discount for electric vehicle purchases

  • Luxury Tax Exemption

    Full exemption from luxury goods sales tax (PPnBM)

  • Land & Permits

    Fast-track land acquisition and business licensing for EV projects

Automotive Investment Segments

Diverse opportunities across the automotive value chain

Electric Vehicle Assembly

USD 15B Opportunity

Manufacturing of electric cars, motorcycles, buses, and commercial vehicles with government incentives

Key Requirements:
  • Minimum USD 100M investment
  • Local content 40% (increasing to 80%)
  • R&D facility in Indonesia
  • Technology transfer commitment
Major Players:

Hyundai, Wuling, BYD, Toyota, Mitsubishi

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EV Battery Production

USD 20B Opportunity

Lithium-ion battery manufacturing leveraging Indonesia's abundant nickel resources

Key Requirements:
  • Minimum USD 500M investment
  • Advanced battery technology
  • Nickel processing integration
  • 5-20 years tax holiday available
Major Players:

LG Energy Solution, CATL, Foxconn, Samsung SDI

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Automotive Components

USD 8B Market

Manufacturing of auto parts, components, and accessories for OEMs and aftermarket

Key Requirements:
  • Competitive pricing capability
  • Quality certification (IATF 16949)
  • JIT delivery capability
  • Export orientation encouraged
Major Players:

Astra, Denso, Aisin, Yazaki, local suppliers

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Commercial Vehicles

USD 5B Market

Production of trucks, buses, and specialized commercial vehicles for logistics growth

Key Requirements:
  • Local assembly preferred
  • After-sales network
  • Spare parts availability
  • Financing partnership
Major Players:

Hino, Isuzu, Mitsubishi Fuso, UD Trucks

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Automotive Services

USD 3B Market

Workshops, dealerships, spare parts distribution, and maintenance services

Key Requirements:
  • Trained technicians
  • Genuine parts inventory
  • Strategic location
  • Brand authorization (for dealers)
Major Players:

Auto2000, Astra, Independent workshops

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Charging Infrastructure

USD 2B Opportunity

EV charging stations, battery swapping networks, and smart charging solutions

Key Requirements:
  • Strategic locations
  • Grid connection capability
  • Payment system integration
  • Government partnership potential
Major Players:

PLN, Pertamina, Shell, Private operators

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Register Your Automotive Company

Indonesia's Automotive Manufacturing Capabilities

Complete ecosystem from raw materials to finished vehicles

Production Facilities

25+

Major automotive manufacturing plants

Component Suppliers

1,200+

Local parts manufacturers

Workforce

1.5M+

Automotive industry workers

Global Brands

40+

International automotive brands operating

Major Automotive Clusters

  • Greater Jakarta (Jabodetabek)

    Largest cluster with Toyota, Daihatsu, Suzuki, Nissan, Mercedes-Benz assembly plants

  • West Java (Karawang-Bekasi-Purwakarta)

    Major industrial zone hosting Hyundai, Mitsubishi, Honda, Wuling factories

  • East Java (Surabaya-Gresik)

    Components manufacturing hub and second-tier supplier base

  • Batam & Bintan

    Free trade zone for export-oriented automotive parts production

Competitive Advantages

  • Strategic Location: Gateway to 650M ASEAN consumers
  • Cost Competitive: Lower production costs than Thailand & Malaysia
  • Resource Rich: Abundant nickel, aluminum, rubber for EV production
  • Skilled Workforce: Large pool of engineering and manufacturing talent
  • Growing Market: Increasing vehicle ownership rate (85 per 1,000 people)
  • Government Support: Strong policy backing for automotive sector

How to Start an Automotive Business in Indonesia

Step-by-step guide for foreign investors

1

Market Research & Feasibility

Conduct comprehensive market analysis, identify target segments, evaluate competition, and assess supply chain requirements.

4-6 Weeks Details
2

Company Registration

Establish PT PMA (Foreign Investment Company) with appropriate capital structure based on automotive business scale and segment.

3-4 Weeks Details
3

Business Licensing

Obtain NIB through OSS with automotive KBLI codes, secure import licenses, and manufacturing permits.

2-3 Weeks Details
4

Site Selection & Setup

Secure industrial land in automotive clusters, obtain building permits, and establish production facilities.

6-12 Months Details
5

Quality Certifications

Obtain IATF 16949, ISO 9001, and Indonesian National Standard (SNI) certifications for automotive products.

3-6 Months Details
6

Production & Distribution

Commence production operations, establish supply chain, build dealer network, and launch products in market.

Ongoing Details

Automotive Business Categories (KBLI Codes)

Official business classification codes for automotive industry

Business Classifications

KBLI Categories for Automotive

Explore Indonesian Standard Industrial Classification (KBLI) business categories relevant to the automotive sector. View all categories

Car Repair and Maintenance

View KBLI Codes

Car Trading

View KBLI Codes

Gardening and Landscape Care Services Activities

View KBLI Codes

Other Social Activities in Residential Care Facilities, etc.

View KBLI Codes

Rental and Operating Lease Activities without Operator of Cars, Buses, Trucks, and Similar Vehicles

View KBLI Codes

Retail Trade Specializing in Motor Vehicle Fuel

View KBLI Codes

Retail trade in chemicals, aromatic/fragrance (essential oils), and non-motor vehicle fuel in stores.

View KBLI Codes

Retail trade in paper, cardboard, and paper/cardboard products.

View KBLI Codes

Retail trade specialized in carpets, rugs, and wall and floor coverings in stores.

View KBLI Codes

River, lake, and ferry cargo transport.

View KBLI Codes

Social Activities in Care and Health Rehabilitation Facilities

View KBLI Codes

The Carpet and Rug Industry

View KBLI Codes

Showing 12 of 18 categories for automotive

View All 18 Categories

Need help selecting the right KBLI code for your automotive business?

Browse All KBLI Codes Get Expert Advice

Frequently Asked Questions

Common questions about automotive business in Indonesia

Yes, foreign investors can own 100% of automotive manufacturing and components businesses under the Omnibus Law. However, certain segments like automotive dealerships may have ownership restrictions. We recommend consulting with our team to determine specific requirements for your automotive business segment.

The minimum investment varies by segment: EV assembly requires minimum USD 100 million, battery production USD 500 million, automotive components USD 10-50 million depending on complexity. These investments qualify for various government incentives including tax holidays.

EV manufacturers can benefit from: 5-20 years corporate tax holiday, 0% import duty on production machinery, 10% VAT discount for EV purchases, luxury tax exemption, and fast-track licensing. Battery manufacturers investing USD 500M+ qualify for the longest tax holiday period. Learn more about tax incentives.

Current local content requirement is 40% for most vehicles, increasing to 80% by 2030 for EVs. Local content includes Indonesian-made parts, assembly labor, and R&D activities conducted in Indonesia. Meeting higher local content thresholds unlocks additional incentives.

From company registration to production launch typically takes 12-18 months: company setup (1 month), land acquisition and permits (3-6 months), facility construction (6-9 months), equipment installation and testing (2-3 months). Our team can help expedite critical path items.

Yes, Indonesia is actively promoting automotive exports. The country has free trade agreements (FTAs) with ASEAN, Japan, Korea, China, Australia, and other markets. Export-oriented manufacturers may qualify for additional incentives. Over 300,000 vehicles are exported annually from Indonesia.

Key certifications include: Indonesian National Standard (SNI) for safety and quality, Type Approval from Ministry of Transportation, IATF 16949 for automotive quality management, ISO 14001 for environmental management, and for EVs, battery safety certifications. We provide comprehensive certification assistance.

Yes, the government provides R&D incentives including: tax deductions up to 300% for qualifying R&D expenses, grants for electric vehicle technology development, support for automotive testing facilities, and partnerships with Indonesian universities and research institutions.

Indonesia is rapidly expanding EV infrastructure with 2,000+ charging stations operational and 20,000 targeted by 2030. State-owned PLN and Pertamina are leading infrastructure development. Private companies can participate in charging station business with various ownership models available.

Highly positive: The market is projected to grow at 7.5% CAGR through 2030, EV sales expected to reach 20% of total vehicle sales by 2030, continued government support through incentives, and Indonesia's positioning as a regional EV manufacturing hub. The growing middle class and infrastructure development drive sustained demand.

Ready to Enter Indonesia's Automotive Market?

From EV manufacturing to component supply, our experienced team provides end-to-end support for your automotive business setup in Indonesia. Join global automotive leaders already manufacturing here.

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