Although Indonesia's new vehicle sales have recorded strong growth of 29% in Q110, BMI warns that this is compared with a low base in 2009, while taxes on second vehicles still pose a downside risk to growth. As such we would expect the rate of growth to slow as the year goes on to give a more representative view of sales compared with the latter months of 2009 when sales were beginning to stage a recovery. Despite the new taxes, we expect sales growth of at least 5% in 2010. This should also support a boost in production, which fell 22% in 2009. In Q110 production grew at twice the rate of sales, with output up by 58%. Although this is in line with our view for a return to output growth in 2010, we would expect a similar pattern to sales, with growth stabilising in the second half of the year. We expect output to return to average annual growth of 10% over the 2010-14 period. The production industry would be further supported by the government's strategy to make the country a major production base such as Thailand has done. A project, very much like Thailand's 'Eco car' programme has been suggested, which will award incentives for the production of 'green' vehicles. Although much of the criteria are yet to be finalised, Daihatsu Motor, Toyota Motor, Suzuki Motor and Nissan Motor have all shown an interest in the scheme, according to the Trade and Industry Ministry and are likely to begin production of fuel-efficient and low-cost cars by 2011. Indonesia needs such investor-friendly policies if it is to rise from eighth place in BMI's Business Environment Ratings of the auto sector in Asia Pacific on 53.9 from a possible 100. It is the region's largest passenger car market and as such, will always have an appeal for investors. Low labour costs, and a competitive environment with room for new players, increase Indonesia's attractiveness, as do its recently upgraded regulations on intellectual property rights (IPRs), which boost its regulatory environment rating. The country's risks to realisation to returns act as a hindrance however, with low scores for corruption, bureaucracy and the legal framework. The country structure score has fallen from 47.5 to 36.3 taking its score for limits to potential returns down from 53.5 to 49.5. The market is still largely dominated by foreign players, particularly Japanese brands, which have a 90% market share. Astra International, which represents Toyota, Isuzu, Daihatsu and Nissan Diesel still leads the market. The company recorded sales of 281,013 units in 2009 and although this was down 3% from 2008, the smaller overall market meant Astra's market share among dealers rose from 52% in 2008 to 58% last year. Toyota is looking to build on its own leading brand position with a revamped version of the Vios sedan, to complement its success in the MPV segment. It claimed 38% of total sales in 2009, with its MPV accounting for around half of its sales. Mini-car specialist Daihatsu took second place in 2009, followed by Mitsubishi Motors in third, although both combined had a smaller market share than Toyota.

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Indonesia Autos Report Q3 2010
Published on June 2010
Report Summary
Although Indonesia's new vehicle sales have recorded strong growth of 29% in Q110, BMI warns that this is compared with a low
base in 2009, while taxes on second vehicles still pose a downside risk to growth. As such we would expect the rate of growth to
slow as the year goes on to give a more representative view of sales compared with the latter months of 2009 when sales were
beginning to stage a recovery. Despite the new taxes, we expect sales growth of at least 5% in 2010. This should also support a
boost in production, which fell 22% in 2009. In Q110 production grew at twice the rate of sales, with output up by 58%. Although this
is in line with our view for a return to output growth in 2010, we would expect a similar pattern to sales, with growth stabilising in the
second half of the year. We expect output to return to average annual growth of 10% over the 2010-14 period.
The production industry would be further supported by the government's strategy to make the country a major production base such
as Thailand has done. A project, very much like Thailand's 'Eco car' programme has been suggested, which will award incentives for
the production of 'green' vehicles. Although much of the criteria are yet to be finalised, Daihatsu Motor, Toyota Motor, Suzuki Motor
and Nissan Motor have all shown an interest in the scheme, according to the Trade and Industry Ministry and are likely to begin
production of fuel-efficient and low-cost cars by 2011.
Indonesia needs such investor-friendly policies if it is to rise from eighth place in BMI's Business Environment Ratings of the auto
sector in Asia Pacific on 53.9 from a possible 100. It is the region's largest passenger car market and as such, will always have an
appeal for investors. Low labour costs, and a competitive environment with room for new players, increase Indonesia's
attractiveness, as do its recently upgraded regulations on intellectual property rights (IPRs), which boost its regulatory environment
rating. The country's risks to realisation to returns act as a hindrance however, with low scores for corruption, bureaucracy and the
legal framework. The country structure score has fallen from 47.5 to 36.3 taking its score for limits to potential returns down from 53.5
to 49.5.
The market is still largely dominated by foreign players, particularly Japanese brands, which have a 90% market share. Astra
International, which represents Toyota, Isuzu, Daihatsu and Nissan Diesel still leads the market. The company recorded sales of
281,013 units in 2009 and although this was down 3% from 2008, the smaller overall market meant Astra's market share among
dealers rose from 52% in 2008 to 58% last year. Toyota is looking to build on its own leading brand position with a revamped version
of the Vios sedan, to complement its success in the MPV segment. It claimed 38% of total sales in 2009, with its MPV accounting for
around half of its sales. Mini-car specialist Daihatsu took second place in 2009, followed by Mitsubishi Motors in third, although both
combined had a smaller market share than Toyota.
Table of Content
Executive Summary .... 5
SWOT Analysis ............ 6
Indonesia Autos Industry SWOT ................. 6
Indonesia Political SWOT ..... 7
Indonesia Economic SWOT .. 8
Indonesia Business Environment SWOT ..... 9
Asia Pacific Regional Overview ...... 10
Business Environment Ratings ...... 19
Table: Business Environment Ratings -- Autos Industry Asia Pacific .... 19
Indonesia Autos Report Q3 2010 Page 1/4

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Industry Forecast Scenario ............. 23
Production And Sales ' Indonesia ............ 23
Table: Indonesia Automotive Market ' Historical Data And Forecasts . 23
Trade ............ 24
Table: Indonesia Automotive Market - Historical Data & Forecasts .... 24
Economic Contribution ....... 25
Table: Indonesia Automotive Market ' Historical Data And Forecasts . 25
Macroeconomic Forecast Scenario 26
Table: Indonesia - Economic Activity, 2007-2014 .......... 28
Competitive Landscape .................. 29
Industry Developments ....... 30
Passenger Segment ............. 31
Indonesia ' Top Ten Vehicle Sales 2009 ... 31
Commercial Segment .......... 33
Commercial Segment Developments ......... 33
Company Monitor ...... 34
Geely Strategy Supports BMI View ........... 34
Table: South Korea - Imported Luxury Vehicle Sales ..... 37
Company Profiles ...... 38
Toyota Astra Motor ............. 38
Suzuki Indomobil Motor ...... 39
Country Snapshot: Indonesia Demographic Data .................... 40
Section 1: Population .......... 40
Table: Demographic Indicators, 2005-2030 ................... 40
Table: Rural/Urban Breakdown, 2005-2030 .................. 41
Section 2: Education And Healthcare ....... 41
Table: Education, 2000-2005 ................... 41
Table: Vital Statistics, 2005-2030 ............. 41
Section 3: Labour Market And Spending Power ............. 42
Table: Employment Indicators, 2001-2006 ..................... 42
Table: Consumer Expenditure, 2000-2010 (US$) ........... 42
Table: Average Annual Manufacturing Wages, 2000-2012 (IDR) ......... 43
BMI Forecast Modelling .................. 44
How We Generate Our Industry Forecasts ..................... 44
Sources ......... 45
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