Posted on 21 Aug 2015
An Indonesian joint venture between General Motors of the US and China’s SAIC Motor and Wuling Motors is eyeing a 10 percent stake of the Indonesian car market by 2022.
Construction of SGMW Motor Indonesia’s $700 million plant in Bekasi, on the eastern outskirts of Jakarta, started on Thursday, with production expected to start in July 2017 with an annual output of 150,000 Wuling-badged MPVs.
SAIC controls the joint venture with a 50 percent stake, while GM owns 44 percent and Wuling holds the remainder.
“We already knew that the Indonesian market is more familiar with Japanese brands, but China's automotive industry has been around for 30 years and we have a high-volume production and quality products,” Xu Feiyun, the SGMW president director, said at a press conference in Bekasi on Thursday.
“I believe that each brand, whether it’s from China, Japan or [South] Korea, will have their own market.”
Domestic car sales in the first seven months of 2015 totaled 581,106 units, down nearly 21 percent from the 733,444 cars that manufacturers sold in the same period last year, according to Gaikindo, the manufacturers’ association. Sales in July alone, at 55,618 units, were down 39 percent from the same period last year.
Toyota is the dominant brand in the country, with market share of 30 percent.
Xu said the SGMW cars would also be exported across Southeast Asia.
“Since the early planning stage, we’ve always intended to export from this factory,” Xu said. “We hope to export at least 10 percent of the units produced in the factory as a start, but hopefully we can increase that figure gradually.”
He identified Vietnam as one of the priority export destinations, as well as markets in Africa and India.
With a total production capacity of about 1.9 million units, local car makers exported 107,448 units of completely built-up cars as of June this year, up 15 percent from last year, according to Gaikindo.
“I really hope that SGMW Motor can contribute to our economy, both in Bekasi as a region and nationally. This is a very big project,” said I Gusti Putu Suryawirawan, the Industry Ministry’s director general of metals, machinery, transportation equipment and electronics.
“Hopefully SGMW Motor can also help spur the growth of automotive components manufacturing and other supporting industries in Indonesia, including the steel industry and plastics industry.”
SGMW Motor says it sold 1.8 million vehicles in China last year, consisting mostly of family cars and commercial vehicles. In the first half of this year, it has sold 986,092 vehicles in its home market, it said.
