When gross domestic product growth boosts people’s purchasing power while consumer confidence is strong, people are willing to buy a car. However, in times of economic uncertainty (slowing economic expansion and reduced optimism – or pessimism – about future personal financial situations) people tend to postpone the purchase of relatively expensive items such as a car. While Indonesia has a well developed MPV and SUV manufacturing industry, the nation’s sedan industry is underdeveloped.
- The central bank of Indonesia decided to revise the down payment requirements for the purchase of a car in an attempt to boost credit growth .
- Currently, Indonesia is primarily dependent on foreign direct investment, particularly from Japan, for the establishment of onshore car manufacturing facilities.
- Selected CoreLink interconnects and system controllers have been optimized for high-performance IVI, powertrain and ADAS systems, targeting ASIL B to ASIL D safety integrity levels.
- The factory would nearly double the water consumption in the Gruenheide area, with 1.4 million cubic meters being contracted from local authorities per year — enough for a city of around 40,000 people.
The free trade agreement with neighboring Australia concluded in spring 2019 offers new opportunities for the automotive industry in Indonesia. Two years later, Indonesian automotive industry managed to penetrate Australian market, marking a significant step toward the revival of Indonesian automotive products that adhere to international quality requirements. With the free trade agreement, car manufacturers which have already settled in Indonesia can count on import tax reliefs in Australia. Attracted by low per capita-car ownership, low labor costs and a rapidly expanding middle class, various global car-makers decided to invest heavily to expand production capacity in Indonesia and may make it their future production hub.
Who needs to Own a Car?
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This is a true missed opportunity in terms of export performance because about 80 percent of the world’s drivers use a sedan vehicle. The key reason why Indonesia has not developed a sedan industry is because the government’s tax system does not encourage the production and export of the sedan vehicle. The luxury goods tax on the sedan is 30 percent, while the tax on the MPV is set at 10 percent. This causes the high sedan price and in order to encourage demand for the sedan its price needs to become more competitive.
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Solutions for Passenger Cars
Major car manufacturing nations like the US, Germany, China, Japan and South Korea, as well as Volkswagen, Toyota, Peugeot, Honda, Nissan and Hyundai, did not pledge. Power study, emerging markets accounted for 51 percent of the global light-vehicle sales in 2010. However, more recent reports confirmed the opposite; namely that the automotive industry was slowing down even in BRIC countries.
Tomorrow’s automotive interior will be fundamentally different in shape and functionality, as end customers demand greater convenience, safety, and individualization. Automobiles are increasingly becoming sources of rich information for in-vehicle, cross-vehicle and cloud based applications that will improve performance, safety, efficiency, and entertainment. These applications may be designed for individual vehicles or address a wide range of them.