Indonesian Automotive Industry Dominated by Chinese Brands

 The global automotive industry has undergone major changes in recent years, and one of the main factors driving this change is the dominance of electric and hybrid car brands from China.

In automotive exhibitions such as the Indonesia International Motor Show (IIMS), we can see how Chinese brands are increasingly strong with a variety of models that carry innovative technology, competitive prices, and increasingly attractive designs.

Since 2022, several new brands from China have entered the Indonesian market, including Neta, Seres, Omoda, and Voyah. Their presence has further enriched the choice of electric and hybrid vehicles in Indonesia, which ultimately increases competition in the national automotive industry.

Amid the onslaught of foreign brands, the local electric vehicle (EV) industry in Indonesia is still in its development stage.

Although the government has provided various incentives to attract investment, the domestic electric vehicle industry ecosystem still faces various challenges, such as the availability of charging infrastructure, battery technology that still relies on imports, and competitiveness in terms of price and features compared to foreign brands.

However, several local manufacturers such as Gesits and Wika Industri Manufaktur have begun to try to establish a foothold in this industry by producing domestically made electric motorbikes.

Japan Loses Strategy on EVs?

Chinese brands, such as BYD, Wuling, and Chery, have proven that they are capable of presenting electric vehicles that are not only affordable but also have continuously improving quality.

This is clearly a big challenge for Japanese manufacturers who have so far dominated the automotive market, especially in the conventional and hybrid vehicle segments. Looking at the current trend, there is a big possibility that Japan's dominance will slowly shift.

Japanese manufacturers have so far been known to be very careful in adopting new technologies. Toyota and Honda, for example, have focused more on hybrid technology than fully switching to electric vehicles.

However, this approach could backfire amidst increasing global awareness of sustainability and regulatory pressures leading to the transition to electric vehicles.

While Japan still maintains its dominance in several segments, Chinese manufacturers have been more aggressive in research and development (R&D) and expansion into various markets, including Indonesia.

Price is one of the main factors that makes Chinese cars increasingly popular.

With more competitive prices compared to Japanese electric cars, consumers have more affordable choices.

In addition, Chinese brands also dare to offer more sophisticated technology with more complete features, which may be difficult for Japanese manufacturers to match with a higher production cost structure.

Electric Vehicles (EV) are a National Interest Strategy of the CHINA Government

From a geopolitical and industrial perspective, China's dominance in the electric vehicle sector is also driven by its government's strategic policies.

The Chinese government has long provided large incentives for the electric vehicle industry, encouraged investment in battery technology, and built an ecosystem that supports the growth of this industry.

Meanwhile, Japan seems to be more conservative in its energy transition policy, which may leave them behind in the electric vehicle race.

So, is this a serious threat to Japanese manufacturers?

It could be.

However, that doesn't mean they will be completely eliminated.

Japan still has advantages in terms of reputation, product reliability, and a more established distribution network.

But if they don't adapt soon and start accelerating the development of more competitive electric vehicles, then their dominance could be completely eroded by the onslaught of Chinese cars.

With abundant nickel reserves, why is Indonesia lagging behind?!

On the other hand, Indonesia has great potential to develop its own electric vehicle industry.

With abundant nickel reserves as the main ingredient for batteries, Indonesia has the opportunity to become a major player in the global electric vehicle battery industry.

If the government and domestic industry can synergize well, it is not impossible that Indonesia could become a center for electric vehicle production in Southeast Asia, reducing dependence on imported products, and at the same time increasing the competitiveness of the local automotive industry.

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