2022On November 21, 2022, a magnitude 5.6 earthquake occurred in Zhanyu County, West Java Province, Indonesia , with a focal depth of 10 km. As of December 5, the earthquake had killed 334 people, injured thousands and left 8 missing. The number of houses damaged in the earthquake exceeded 35,000, and nearly 115,000 victims were left homeless. Indonesia’s manufacturing industry is mainly concentrated in West Java Province, which accounts for about 40% of its regional GDP, including electronics, leather, furniture, oil and gas, petrochemicals, automobiles, etc. Among them, automobiles are particularly important, accounting for 11% of the country’s total GDP.
Indonesia’s auto industry is one of the industries most affected by the earthquake, mainly because the vast majority of factories are located in West Java, Indonesia. Auto sales from January to October 2022 will reach 850,000, a year-on-year increase of 21% %, but the earthquake in November will have a certain degree of impact on December and even the beginning of 2023. The production and sales volume of the Indonesian auto industry has been in the leading position in Southeast Asia since 2021. Although the production volume is slightly lower than that of Thailand, the sales volume ranks first. Among them, Japanese cars have always had a monopoly position in Indonesia. In 2021, Japanese cars accounted for 94% of the total sales, of which auto giant Toyota accounted for 33%. According to the report of Japan’s Toyota Motor Corporation, Toyota has built three automobile factories in Indonesia, all of which are located in West Java. In terms of imports, polyurethane products and raw materials used in automobile production will also drop significantly.
Data source: marklines
In the whole year of 2021, the sales volume of new cars in Indonesia will reach 887,200. From January to October this year, the sales volume of Indonesian cars will reach 850,000, which means that the automotive coatings market is bound to show an upward trend trend. Indonesia is the largest coatings market in Southeast Asia, driven by its population of 279 million, high urbanization rate (57%), vibrant automotive industry and rising disposable income of a large middle class. In November this year, the Group of Twenty (G20) summit was held in Bali, Indonesia. In 2021, the Indonesian government proposed the goal of achieving carbon neutrality by 2060 or earlier. For this reason, electric vehicles have become a priority industry in Indonesia. In order to support the development of Indonesia’s new energy vehicle industry, Indonesia has introduced corresponding incentive measures, such as implementing zero import tariffs on imported IKD parts (parts that are not fully assembled) for electric vehicles with four wheels or above; pure electric vehicles enjoy zero consumption tax on luxury goods. Tax concessions. It plans to gradually achieve the goal of producing 400,000, 600,000 and 1 million electric vehicles in 2025, 2030 and 2035. After the summit, although the earthquake had a certain impact on local automobile production, when production capacity resumes in 2023, sales of electric vehicles are bound to rise.
Summary:
Although the earthquake has had a considerable impact on Indonesia’s manufacturing industry, the automobile industry will still be one of the main development directions of Indonesia in the future. As the fourth most populous country in the world, every 35 people own a car on average. From the perspective of car popularity, it is far behind Thailand (1:14) and Malaysia (1:7), both Southeast Asian countries. , but judging from the development level of per capita GDP close to 4,000 US dollars, it is in a critical period of the rise of family car consumption. In the future, the market for automobile production and automobile coatings will still be on the rise.
