Future Growth Potential of the Automotive Industry due to Sector-Focused Incentives that Cushion Economic Recovery
In 2020, Indonesia’s automotive total industry volume (TIV) dropped by 48.4%, compared to 2019, with only 532,030 units being sold. The passenger vehicle (PV) segment remained dominant with 73.1% market share. The economic growth for 2020 was the weakest since the 1998 Asian financial crisis. Factors impacted by the COVID-19 pandemic include Gross Domestic Product (GDP) growth, purchasing power, and the automotive industry development.
The largest contribution to passenger car sales was from segments with products priced at IDR 250 million and below, which were mainly the 4X2 and LCGC segments. The 4X2 segment’s slight growth has been supported by new model releases from top-selling brands, which appeals to the less-affected upper middle income group buyers. This is comparable to low cost green car (LCGC) segment that had no new models or variants introduced, and mainly catered to lower middle income groups with spending restrained during the pandemic.
In the commercial vehicle (CV) segment, pick-up maintained sales with sustained demand in the logistics and eCommerce market. Bus demand was limited with strict inter-provincial travel restrictions during the year’s COVID-19 pandemic, and heavy-duty vehicles find a staggering decrease due to a decline in construction activities.
In 2021, Indonesia’s TIV is projected to improve with 36.3% growth, following slow economic recovery as well as Phase 1 COVID-19 vaccination that is targeted for completion as early as March. Indonesia’s GDP is expected to rebound from (2.1%) growth in 2020 to 5.1% in 2021, contributed by the recovery of major trade and manufacturing industries.
Indonesian government is expected to come up with right-on-target stimulus plans for the automotive industry as regulatory aid is needed to bolster purchase in the market. Fiscal policies comprising of customs and import taxes should be considered following neighboring countries implementing protectionism measures to recover their respective domestic economies.
Due to the pandemic, eHailing and rental services have witnessed a staggering decline in demand due to social distancing and work-from-home policies. This trend is expected to continue in 2021 and will gradually improve as economic activities recover from the recession.
On-demand delivery service is expected to continue to increase in 2021, accelerated by the growth of eCommerce businesses and instant package deliveries. Operators in the shared mobility market are expected to continue to diversify their services within the same platform.
Table of Contents
1. Growth Environment- Highlights of Indonesia’s Automotive Industry
- Challenges Faced by Indonesia’s Automotive Industry Due to COVID-19
- Indonesia’s Automotive Industry in 2020 - Actuals vs. Forecast
- Indonesia’s Automotive Industry - Historic Sales
- Top Predictions for 2021
- Why Is It Increasingly Difficult to Grow?
- The Strategic Imperative 8™
- The Impact of the Top 3 Strategic Imperatives on the Automotive Industry
- Growth Opportunities Fuel the Growth Pipeline Engine™
- Research Scope
- Market Segmentation
- 2020 Global Economic Highlights
- The 2020 Global Economy - Actuals vs. Forecast
- COVID-19 Impact on World GDP Growth
- Global Growth Scenario Analysis - Assumptions
- World GDP Growth Under Differing Scenarios
- COVID-19 Impact on Key Regions
- Top 2021 Global Economic Predictions
- 2021 Global GDP Growth Snapshot
- Advanced Economies - Predictions for 2021
- Emerging Economies - Predictions for 2021
- 2021 Growth Opportunities - Top 3 Opportunities by Region
- 2021 Regional Trends - GDP Growth, Economic Risks, and Policy Direction
- Indonesia - Economic Perspective
- Indonesia - Industry Performance
- Indonesia - 2020 Highlights
- Indonesia: Economic Stimulus Packages - COVID-19 Relief
- Indonesia: What is Happening? - An Overview of the Omnibus Law
- Indonesia: What is Next? - Proposal for Capital City Relocation
- Snapshot of Indonesia’s Automotive Market
- Automotive Market Breakdown by Vehicle Segments
- Leading OEMs and Vehicle Models in Indonesia
- Policy Direction
- Overview of Policies Related to the Automotive Industry
- LCEV Program - Policy Framework
- BEV Acceleration Program - Policy Framework
- National Energy Policy and Master Plan (RUEN) - Policy Framework
- Biofuel Development Road Map - Policy Framework
- Emission Standard and Fuel Specification - Policy Framework
- Existing Incentives for the Automotive Sector, an Overview
- Predictions for 2021 - Indonesia’s Automotive Market
- Government Regulations on EVs
- BEV Acceleration Program (Presidential Decree No. 55/2019)
- Specification, Road Map, and Percentage of Local Content (MOI Regulation 27/2020)
- CKD and IKD Schemes (MOI Regulation 28/2020)
- Implemented Fiscal Incentives for EVs
- EV Type Testing (MOTp Regulation 44/2020)
- EV Charging Infrastructure (MEMR Regulation 13/2020)
- HEV and EV Market Snapshot
- HEV and EV Product Pricing
- Charging Infrastructure Snapshot
- Charging Operators
- Charging Infrastructure Development Plan in Indonesia
- Key Predictions for 2021 - Indonesia’s HEV and EV Market
- Government Regulations
- Shared Mobility - Definition
- Car-sharing Market Snapshot
- Leading Car-sharing Operators
- eHailing Market Snapshot
- eHailing Operators
- Case Study - A Shift from Conventional Transport Services
- Predictions for 2021 - Indonesia’s Shared Mobility Market
- Snapshot of Connected PV Solutions in Indonesia
- Case Study - Mazda CX-5 Offers the Most Advanced Connected Mobility Solution
- Snapshot of Connected CV Solutions in Indonesia
- Predictions for 2021 - Indonesia’s Connected Mobility Market
- Main 2021 Automotive Market Trends
- Prediction 1 - PV Segment to see Modest Growth in 2021
- Prediction 2 - Noteworthy Growth in the EV Segment
- Prediction 3 - An Apparent Shift in Shared Mobility Providers
- Growth Opportunity 1 - New Product Development and New Product Launch for Battery Electric Vehicle Ecosystem Participants, 2021
- Growth Opportunity 2 - Strategic Partnership for EV Charging Operators, 2021
- Growth Opportunity 3 - Competitive Strategy for Battery Electric Vehicle Industry Participants, 2021
- Conclusions and Future Outlook - Overall Automotive Market
- Abbreviations and Acronyms Used
- List of Exhibits
