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Chapter

Indonesia

Chapter

Indonesia

DOI link for Indonesia

Indonesia book

Indonesia

DOI link for Indonesia

Indonesia book

ByKaoru Natsuda, John Thoburn
BookAutomotive Industrialisation

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Edition 1st Edition
First Published 2020
Imprint Routledge
Pages 22
eBook ISBN 9780429445354

ABSTRACT

This chapter provides an historical perspective on Indonesian automotive development, which can be classified into five phases. The first phase (1928–1968) was the early stage of the industry. The second phase (1969–1992) is characterised by policy for localisation under ISI. The third phase (1993–1998) is associated with an unsuccessful national car project. The fourth phase (1999–2012) is characterised by the liberalisation of the industry under the WTO rules. The fifth and latest phase (2013–present) is characterised by the new industrial policy of the low-cost green car (LCGC) project. Until the late 1990s, the development of the industry was slow. After the liberalisation forced by the conditionality of the International Monetary Fund (IMF) and the WTO, the Indonesian automotive industry has developed steadily, finally producing over a million vehicles in 2012. However, issues like increased political stability may well have been more important drivers of expansion than simple liberalisation or particular policies, though such policies have become more influential as the investment climate has improved and become ‘good enough’. Although Indonesia lacks effective soft industrial policies, its automotive growth trend is expected to continue with future domestic market growth, and also its LCGC project.

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