BMI's Executive Summary

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Indonesia's automotive industry is well on track to achieve a recovery from its collapse of 2006. By October 2007, sales had risen by 37.3% y-o-y to 349,489 units for the 10 months combined. October's monthly sales grew by over 50%, signalling the 15th consecutive month of growth since Bank Indonesia (BI) began its rate cuts. Although the growth in sales is in line with BMI's expectations, we have been forced to once more revise our sales estimate for 2007 upwards to 414,539 units, a 20% improvement on 2006. For the remainder of our five-year forecast period, now extended to 2012, we would expect the positive growth to be sustained.

Production also looks set to receive a boost from potential major investments. Renault has approached the Indonesian investment authorities with plans for a potential US$600mn plant, which would become the carmaker's South East Asian production hub. General Motors (GM) is also considering Indonesia for a new plant for its Chevrolet models, while South Korea's Hyundai has invested in a commercial vehicles joint venture. Consequently, BMI expects the country's automotive production to top 500,000 units by 2010 rising to just short of 625,000 by 2012. Increased production activities will also give rise to the market's growing export industry, which we expect to account for over 30% of domestic automotive production by the end of the forecast period.

This buoyant outlook for Indonesia is reflected in BMI's Business Environment Ranking for the automotive industry in the Asia Pacific region, where the market ranks joint second alongside highgrowth market India. High scores have been awarded for the country's CBU output growth potential, which has risen with our extended forecast, while the level of vehicle ownership is still relatively low, creating further opportunity for sales growth. Moreover, Indonesia is geographically well positioned to act as a regional base, while the industry is supportive of foreign investment. An ongoing risk remains, however, in the shape of terrorism threats.

Japanese manufacturers continue to dominate the competitive landscape. Toyota led the market in the year to October 2007, with a market share of 34.5% from sales of 120,552 units. In October, the company's sales rose by 38% to 11,310 units for a market share of 36.2%. Toyota was followed by Mitsubishi in second with a market share of 15% and Suzuki on 10.7%. If Renault's production base is finalised this could provide an opportunity for European brands to make more of a mark in Indonesia, while Geely and Chery have paved the way for Chinese brands.

Contents

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Chapter 1 – SWOT Analysis

Indonesia Auto Industry SWOT

Indonesia Economic SWOT

Indonesia Business Environment SWOT

Chapter 2 – Regional Market Overview

Table: Asia Pacific Autos Production – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: Asia Pacific Autos Sales – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 3 – Business Environment Ranking

Table: Asia Pacific Business Environment Ranking

Economics – Long-term Risk

Politics – Long-term Risk

CBU Output Growth

Vehicle Ownership/Penetration Potential

Regulation

Competitive Environment

Chapter 4 – Industry Forecast Scenario

Production and Sales

Table: Indonesia Automotive Market Historical Data & Forecasts (CBUs unless otherwise stated)

Trade

Table: Indonesia Automotive Market Historical Data & Forecasts (CBUs unless otherwise stated)

Economic Contribution

Table: Indonesia Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 5 – Macroeconomic Forecast Scenario

Table: Indonesia – Economic Activity

Country Snapshot: Indonesia Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 6 – Special Focus: Commercial Vehicles

Country Landscape

Table: Indonesia Commercial Vehicle Sales

Key Players In The Commercial Vehicle Sector

Chapter 7 – Competitive Landscape

Market Overview

Industry Developments

Passenger Segment

Table: Indonesia Vehicle Sales 2005

Two-Wheeled Segment

Chapter 8 – Company Monitor

General Motors Asia Pacific Regional Overview

Table: GM Asia Vehicle Production 2005 (CBUs)

Table: GM Asia Vehicle Sales 2005 (CBUs)

Profiles

Toyota Astra Motor

Suzuki

Honda

BMI Forecast Modelling

Automobile Industry

Sources

Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave. per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Asia Automotives: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Automotive Sources

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BMI's Asian Automotives Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: