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Automotive industry becomes 5th-largest contributor to forex

Jakarta (ANTARA) – The automotive industry is a sector that contributes significantly to exports, according to the Ministry of Trade.

“The automotive industry is a sector that contributes significantly to exports,” Acting Director General of Foreign Trade, Indrasari Wisnu Wardhana, noted during the webinar ‘National Automotive Sector: Turning Challenges into Opportunities’ here on Thursday.

According to Wardhana, the automotive sector is a crucial sector that is the fifth-largest contributor to foreign exchange from exports, after steel, machinery, and electronic equipment.

Wardhana noted that Indonesia was the sixth-largest automotive market for non-oil and gas exports during the January-April 2021 period, with exports valued at US$3.13 billion. Meanwhile, Indonesia’s automotive exports also increased by 35.67 percent during the January-April 2021 period, from the corresponding period in 2020. The increase reflected that exports had undergone a transformation, from commodity-based to manufacturing-based.

“We have transformed, from commodity-based exports to manufacturing-based exports, as out of the five sectors that contribute the largest exports, three are exports from the manufacturing industry,” he remarked.

According to the Ministry of Trade’s data, the top five destinations for Indonesia’s automotive exports are the Philippines, Vietnam, Thailand, Japan, and Saudi Arabia.

Indonesia’s exports to these countries clocked a fairly good rise, with exports to the Philippines increasing 41.27 percent, exports to Vietnam soaring 42.98 percent, a 22.01-percent increase to Thailand, 34.25-percent increase to Japan, and 8.64-percent increase to Saudi Arabia in the first quarter of 2021, from the corresponding period in the previous year.

Wardhana remarked that huge opportunities existed in the domestic automotive sector, considering the ratio of car ownership in Indonesia was still relatively low, at only 99 units per 1,000 people. Hence, the domestic automotive industry is expected to grow even more in future.

Meanwhile, he also urged domestic automotive industry players to seriously work on this sector, given the huge market opportunities due to the low ratio of car ownership.

“Hence, we see that the potential opportunity for growth in the automotive sector in Indonesia is still quite large,” he added.


Source: Antara News


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June 2023