Gaikindo: Indonesian car production capacity reaches 1.9 million

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Gaikindo: Indonesian car production capacity reaches 1.9 million

Gaikindo: Indonesian car production capacity reaches 1.9 million

The Indonesian Automobile Industry Association (Gaikindo) said that Indonesia's total automotive production capacity currently stands at 1.9 million units. However, the level of production of four-wheeled vehicles in the country is only about 1.2 million units, or 63%, following a decline in sales over the past two years.

Jongkie D. Sugiarto, chairman of Gaikindo I, said a number of automakers have been investing heavily in the auto sector for four years.

As a result, domestic auto production capacity has increased and penetrated 1.9 million units per year.

"But all this investment was not used because last year, the domestic sales were only 1.01 million units plus 200 000 exports, so there is an excess production of 700 000 units." Jongkie told CNN's Lunch on Newsroom program in Indonesia on Tuesday (9/2). )

Market potential is still wide open in Indonesia, said Jongkie, because of the development of the main. "GM-Wuling came to Indonesia because it saw (potentially) long-term," he said.

According to Jongkie, the decline in car sales in the past two years has been temporary or short-term.

The economic slowdown factor, coupled with the depreciation of the exchange rate and falling commodity prices, was seen as the main cause of the weakening of the domestic auto market.

"Motor vehicle sales were down 16% from 2014. Last year, commercial vehicles fell the most because the mining sector was very weak, but almost all types of vehicles dropped 10-15%. % on average, "he said.

Gaikindo, he said, had targeted the sale of 2 million car units in Indonesia by 2022. The target is based on the assumption that average economic growth is above 5% per year.

"If the economy grows by 7 to 8 percent a year from now, I'm sure the figure (sales of 2 million cars) can be reached," he said.
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