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A number of car industries are interested in investing in Indonesia

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By: Made Raditya )*

The Indonesian government is trying to improve investment regulations in Indonesia. The regulation seems to have attracted investors from abroad to invest in Indonesia, especially in the automotive sector.

In developing the automotive industry, of course, the Indonesian government needs to emphasize that there is a transformation towards green technology. So there is a need for cooperation to realize this transformation

The Minister of Industry (Menperin), Agus Gumiwang, ensured that Chery Motor as an automotive from China will invest in Indonesia starting in 2022. The total investment that will be disbursed by Chery is also not kidding, which is 1 billion US Dollars or equivalent to Rp. 148 trillion. The plan is that the investment will be disbursed in 4 stages until 2028. Agus also said that in 2022, Chery will start producing SUV-type vehicles first.

Agus also mentioned, not only 1 or 2 Chery cars produced in Indonesia, but 9 cars at once until 2028. Later, some of the cars made by Chery Indonesia will also be marketed abroad and Indonesia is projected to become Chery’s export hub specifically for the Southeast Asian market. Then, in 4 stages of development until 2028, the factory will produce 9 models with proportions for the export market.

Not only that, Chery apparently also supports green investment that is being predicted by Indonesia, where PT Chery Motor Indonesia will prepare to produce electric vehicles. PT Chery Motor Indonesia, Tao Yong said, this factory will not only function for the production of combustion engine cars , but we also plan to build a research and development center, a spare parts production center, and the production of electric vehicles.

The choice of Indonesia as a destination, of course, is not without reason, Chery reasoned that Indonesia is one of the production bases for electric vehicles. The Indonesian government also continues to focus on supporting electrification, which is one of Chery’s interests to produce electric vehicles in the country.

Tao said that at first his company also had diesel engine technology, but he considered that it was outdated. PT Chery actually thinks that gasoline engines still make sense and electric cars are a better and easier thing. So later the company will focus on gasoline engines and electric cars.

Chery has also communicated intensely with the Ministry of Industry and stated his commitment to making Indonesia an ASEAN hub and part of the company’s global exports. In 2022, Chery will gradually start producing SUVs with a total of nine models and some of them are for export.

Apart from Chery, Indonesia has also managed to pocket investment commitments from two Japanese automotive giants, namely Toyota and Mitsubishi. Where both brands have stated their approval to increase capital in Indonesia.

On the occasion of a meeting with the leaders of automotive companies in Japan, Mitsubishi Motor Company (MMC) has committed to invest Rp 10 trillion which will be realized from 2022 to 2025.

Furthermore, Toyota Motor Corporation (TMC) will also increase investment in the country by Rp 27.1 trillion for the next five years (2022-2026). Thus, from the pair of corporations, a total of Rp 37.1 trillion of capital was obtained which will be invested domestically.

The Indonesian government appreciates and supports the realization of this commitment, and hopes for Mitsubishi to accelerate the production program of battery-based KBL technology vehicles or EV Keycars in Indonesia. In addition, it is expected to continue to export SUV-type vehicles from Indonesia to the Australian market within the next one year.

To Toyota, the government also hopes that the manufacturer will also be involved in supporting efforts to increase the use of local components in Indonesia, especially components from small and medium industries. This shows that the existence of investment also has an impact on economic development in the small and medium sector. If the automotive giant uses components from Indonesia, it is certain that many local entrepreneurs will experience an increase in income.

The interest of foreign investors in Indonesia must of course be supported and facilitated. Because these investments will have a long-term impact on improving the national economy. On the other hand, additional capital to develop a business will also have an impact on the absorption of labor. How not, the national automotive industry has succeeded in absorbing 38 thousand workers, and involving more than 1.5 million workers along the industrial value chain, including in the component sector IKM.

Indonesia is a strategic country to become the basis for the automotive industry, especially in the effort to realize electric vehicles which are considered environmentally friendly. Of course, this cannot be done without investment, so investment from the automotive industry from various countries is needed so that green investment can be realized.

)* The author is a contributor to the Pertiwi Institute

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