With a 67 percent increase in sales volume, Indonesia moved up to #15 on the list, passing four countries, according to F&I Tools record for 2021.
According to the Indonesian Automobile Manufacturers Association (Gaikindo) and other sources, Indonesian car sales in December 2021 were 96,673 units, rising 69.2 percent from the same month in 2020, when the coronavirus pandemic had a significant impact.
In 2021, overall sales reached 887,202 units, up 66.8% from the previous year. This outcome exceeds LMC Automotive's (775,000 units) July prediction and Gaikindo's (800,000 units) October 2021 forecast.
Toyota sales increased 83.4 percent to 295,768 units (33.3% market share) in 2021, while Daihatsu sales increased 81.8 percent to 164,908 units (18.6% market share), Mitsubishi sales increased 85.8% to 107,605 units (12.1 percent market share), Suzuki sales increased 38.8% to 91,793 units (10.3 percent market share), and Honda sales increased 24.3 percent to 91,122 units (10.3 percent market share).
According to Gaikindo, car sales could reach 900,000 units in 2022, representing a 20% increase year over year.
Who is winning the vehicle wars in Southeast Asia?
Thailand continues to be the country in Southeast Asia with the greatest car sales. Thailand has long been a contender for Southeast Asia's vehicle manufacturing powerhouse. Indonesia's automobile sector, on the other hand, is constantly expanding.
Thailand could easily have claimed the status of undisputed vehicle manufacturing powerhouse in Southeast Asia ten years ago. COVID-19 has changed everything in the near term, but Indonesia was beginning to offer a real challenge to Thailand's industrial domination even before the pandemic.
Thailand took the opposite path in the 1990s, following the IMF and WTO's lead and opening up its supply chains to international investment and imports. Thailand produced over 600,000 cars in 1995, almost all of which were sold to Thai consumers.
Thailand produced 1.9 million automobiles in 2015, with 800,000 sold domestically and 1.2 million exported. Thai manufacturers were able to specialize and enhance their efficiency, making their automobile exports the most competitive in the area, thanks to attractive investment incentives and more freedom in how foreign automakers handled their supply chains.
Indonesia took a course that was in the middle of the two. In an unsuccessful attempt to boost the domestic auto manufacturing industry in the 1970s and 1980s, it established tough protectionist barriers and required local content standards.
However, it wasn't until the mid-2000s, when post-crisis per capita GDP began to recover in earnest, that Indonesia's auto sector began to take off.
In comparison, Indonesia's vehicle industry soared thanks to strong local demand, which increased from 486,000 in 2009 to 1.2 million in 2014. Because Indonesian firms were able to scale up production so quickly to satisfy soaring domestic demand, they were able to benefit from more effective economies of scale, and Indonesian exports became competitive.
Since 2013, Indonesia has been a net exporter of automobiles, with 332,000 exported in 2019. Unlike Thailand, production did not increase to satisfy the demand for exports. Instead, exports were a result of a surge in domestic sales.
In 2018, total production in Indonesia reached a high of 1.3 million units, trailing Thailand by several hundred thousand units, giving Thai automakers the upper hand for the time being. However, this regional battle for sector leadership raises some fascinating considerations about whether export-led growth, which is dependent on foreign demand, is a better development model than growth driven by internal demand.
We may soon have a clearer answer to that issue if Indonesia's economy continues to grow as expected in the coming years – and as long as a sufficient share of national revenue ends up in the hands of people who will spend it on consumer goods.
Malaysia is signing in...
Aside from that, there is one more player in Southeast Asia. Malaysia attempted it with a national automobile company. The government built trade barriers to make importing foreign automobiles prohibitively expensive and then sought to produce the Proton, a domestically designed and manufactured automobile.
Proton has a large part of the captive Malaysian market, but it has a small presence outside. Because the market for Protons is currently saturated, there is a limit to how much growth can be generated locally. Malaysia did construct its national automobile by focusing on the home industry behind protectionist barriers, but it isn't competitive when compared to global competition.
Source : The Diplomat, Worldpopulationreview.com, F&I Tools, Marklines Statistics
