Japanese Media: BYD's Indonesia Factory Opens, Japanese Automakers Face Increasing Pressure

According to a report by the "All-Nippon Television Network" on September 4: BYD's new factory in Indonesia, with an annual production capacity of 150,000 units, has officially opened and will deepen its presence in Southeast Asia through localized manufacturing.

As BYD’s Indonesian subsidiary—the largest electric vehicle (EV) manufacturer in China—the factory was formally inaugurated on the 3rd in Sukabumi Regency, West Java. The investment amounts to 11.7 trillion rupiah (approximately 10.4 billion yen), with an annual production capacity of 150,000 vehicles.

Since entering the Indonesian market two years ago, BYD has seen rapid sales growth, accumulating total sales of around 100,000 units. Sales are expected to exceed 200,000 units next year.

Meanwhile, Japanese automakers—already dominant in Indonesia and Southeast Asia with high market share and overwhelming competitive advantages—are becoming increasingly vigilant and beginning to seek defensive strategies. However, industry insiders strongly warn that “competition will become extremely fierce as BYD begins local production.”

Li Xueliang, Vice President of BYD and General Manager of Asia-Pacific Automotive Sales, explained: “We have established all stages of production processes in Indonesia—from stamping and welding to painting and assembly.” He emphasized that BYD’s sales in Indonesia have already approached 100,000 units domestically, with a goal of reaching 200,000 units next year.

The models produced at the Indonesian factory include the most popular compact EV, the “ATTO 1,” and the best-selling three-row multi-purpose vehicle (MPV) in its segment, the “M6.”

It is reported that the factory began operations in May and has already created over 5,000 local jobs. If fully operational, the workforce is expected to expand to 20,000 employees.

The local content standard (TKDN) currently exceeds 40%, with plans to increase it to 80% by 2030 to meet Indonesia’s government targets.

BYD already operates factories in Thailand and is advancing construction plans in Malaysia. The annual production capacity of the Thai factory is also 150,000 units, matching that of the Indonesia facility.

Indonesia’s Minister of Industry, Agus, attended the opening ceremony and emphasized: “In light of the strong development of the electric vehicle market, we welcome the arrival of BYD’s factory.” He described BYD’s successful entry into the Indonesian market and expansion of manufacturing as a significant milestone for Indonesia’s industrial sector and expressed hope that BYD would eventually evolve into an export hub. He also urged investment across the entire EV ecosystem, including raw material processing, battery manufacturing, and recycling.

BYD entered the Indonesian market in 2024. Thanks to strong market reception for models like the Atto 1 launched in the second half of last year, coupled with government incentives for EVs, sales have grown rapidly.

According to announcements made during the opening ceremony, as of June this year, the company has sold 93,869 units since entering the market, capturing a 43.2% share of the EV market. In the first half of this year, new car sales temporarily declined due to factors such as the shift to local production. However, according to data from the Indonesian Automotive Manufacturers Association (Gaikind), BYD’s retail sales from January to July rose by 72% compared to the same period last year. In May this year, the M6 plug-in hybrid (PHV) was launched, further diversifying the company’s EV lineup.

The most anxious parties are undoubtedly Japanese automakers. Industry experts point out that if BYD accelerates local production, its cost competitiveness will improve, potentially intensifying competition in the Indonesian market. Chinese automakers can also achieve shorter delivery times, thereby enhancing service quality.

In the Indonesian new car market, Japanese brands still hold nearly 80% of the market share. However, as EV sales grow, the rise of Chinese brands is becoming increasingly evident.

Indonesia’s import tax incentives for electric vehicles were only available until the end of last year, provided that manufacturers transitioned to local production.

Other EV factories continue to receive investments in Indonesia. In December last year, Vietnam-based EV manufacturer VinFast opened a plant in Sukabumi Regency.

Recently, in August, several Chinese automakers—including Farizon Auto under Geely’s New Energy Vehicle division and Zhiyun Technology—announced plans to build factories in Purwakarta, West Java.

For decades, Japanese automakers have dominated the Southeast Asian market with overwhelming market share—now they face encirclement.

Original source: toutiao.com/article/1875448469468298/

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