VISI has predicted that by the end of 2019, the automotive sector will experience growth. Where in 2017 they grew by 3.68 percent, as well as in 2018 where they grew by 4.24 percent, and in 2019 it is predicted to grow by 6.04 percent. There may have been some factors that impacted this, including the number of factory employees, the value of exports, wholesale and retail sales, as well as the current infrastructure development plans.
Based on data from the Ministry of Industry, currently, there are around 8,000 new workers in the car factory. The total number of new workers in the component industry is around 25,000. Also, there will be 50 to 70 new component factories with a total investment of around IDR 6 trillion. This indicates a decline in factory production that has operated toward its product demands and it also shows a positive potential. Additionally, investing in the automotive industry is considered enticing and potential. In fact, the potential of the automotive industry ranks second highest after the steel industry, which reaches 11 percent of total gross domestic product (GDP).
Based on its development, the volume of passenger car production in the last 2 years has decreased quite dramatically in June. This is caused by the implementation of fasting during Ramadan and Eid al-Fitr where companies usually take their employees off work for one or two weeks before and after the celebration of the holiday. Whereas, aside from June, it can be seen that the productivity of each month is quite stable in the range of 100,000 to 130,000 units.
This indicates a positive performance within the wholesale and retail-sale segments, of which declined in the same month as sales in the 100,000-unit range each month. If we were to match the monthly production volume, there are around 20,000 – 30,000-units of deadstock products every month.
As for exports, Indonesian automotive manufacturers are still expected to be able to boost vehicle export sales to 250 thousand cars in 2019. This figure is higher than in 2018 which is in the range of 200 thousand units. Although in early 2019 the shipping process from Indonesia to Vietnam had experienced obstacles, by mid-2019 the export constraints had been successfully overcome. One of them is because of the producer’s ability to make adjustments to the implementation of new regulations that could hamper RI exports during the first 6 months in 2018.
Based on data from the automotive industry Association of the Indonesian Automotive Industries (GAIKINDO) July 2019, there was a significant increase in the volume of CKD exports in early 2019. In January 2019, there was an increase in export volume of more than 10 times the volume of exports in the same period in 2018 that was from 5,698 units to 70,000 units.
From the influence of infrastructure, road infrastructure development is expected to be one of the driving factors in the growth of the automotive industry in 2019, which is estimated to reach 1.1 million units. The Indonesian Automotive Industry Association (GAIKINDO) said that road infrastructure development plays an important role in driving economic growth, including vehicle sales. The reason being, with equitable development, is expected to cause economic activity in the region stretched so that purchasing power increases.