PT Isuzu Astra Motor Indonesia will export 6,000 units of Isuzu Traga to the Philippines in 2020 - Photo by the Company.

JAKARTA (TheInsiderStories) – Indonesia’s joint venture automobile and commercial vehicle manufacturer, PT Isuzu Astra Motor Indonesia will export 6,000 units of Isuzu Traga to the Philippines in 2020. The export will generate foreign exchange of US$66 million, the company said to the media on Thursday (12/11).

Its president director Jap Ernando Demily said the export was aimed to improve the quality of Isuzu products to meet world-class quality standards. While the ultimate goal is to make Indonesia as Isuzu’s global production base outside of Japan.

As the global production base, in the next three years, Isuzu Indonesia plans to export Isuzu Traga to more than 20 countries. They will not only export to Southeast Asia countries but also to countries in the Middle East, Latin America and Africa.

Demily claimed, Isuzu Traga has obtained the Ease of Importation of Export Purpose facility from Customs and Excise. The facility makes Isuzu does not have to pay import duties and import tax on raw materials.

While Isuzu Traga is produced at the Isuzu Karawang Plant. The new plant has a land area of ​​30 hectares with a regular capacity of 52,000 units per year and can be optimized to 80,000 units per year.

The export also gave a positive impact on Isuzu’s business. The export activity requires the 119 supplier companies and provide an additional income of up to $9 million per year, as well as additional turnover for logistics companies of $300,000 per year.

Meanwhile, President Joko Widodo, who was present at the inauguration of exports, hoped that the exports could resolve the current account deficit (CAD) problem. He also targeted that Indonesia could export at least one million units of vehicles in 2024.

Beside Isuzu, since February 2019, Hino Indonesia has exported Euro-4 standard 4-wheeled bus chassis which will be part of the Jeepney rejuvenation program in the Philippines. Jeepney is a Filipino mass transportation and is modernizing.

As of June 2019, Hino Indonesia has exported 80 units of the total targets 350 units by the end of 2019. While, until July 2019, Hino has exported Dutro to Cameroon, Mali, Burkina Faso, Ivory Coast, Sierra Leon and the Democratic Republic of the Congo.

Thus from 2010 to July 2019, Hino has sold vehicles to 15 countries. Furthermore, Hino will export cars to the Republic of Congo, Senegal, Guinea, Guinea Bissau, Chad, Togo, Central Africa, Niger, Benin, Mauritania, Gambia, and Liberia.

Meanwhile, Indonesian car sales dropped 11.54 percent to 90,403 units in August from same month in 2018 of 102,197 units. Cumulatively, the car sales from January – August 2019 jumped by 13.5 percent to 660,286 units from the same period in 2018 at 763,444 units.

Publicly listed car producer, PT Astra International Tbk (IDX: ASII) still dominated the market acquired by 52 percent with total sales of 344,216 units. Non-Astra like Mitsubishi, Honda, Suzuki, Nissan, and other car sales sold 316,070 until August.

The association sees this year’ national car sales will not be achieved cause low demand, tight competition, and an influx of new players and variants from abroad, such as Chinese’ Wuling, Mitsubishi Xpander, and Nissan.

The association’ chairman Johannes Nangoi still optimistic that the new car sales could reach one million units this year caused the political situation getting normal. During the general elections and the effects of trade war make the buyer cautious and hold their plan to buy the car. This discount war has influenced car market sales in Indonesia.

The association also reported, one of the most recent variants that Indonesian consumers are most like is Wuling. The Chinese car producer’s sales grow 2 percent in the past year. Since launched in February 2019, the manufacturer has sold 980 cars.

According to analysts, car sales still have a chance to rise double digits if the economy grows by around 7 percent. They expect that throughout 2019, discount wars will diminish because the producers are beginning to maintain their profit margins.

To support the domestic car sales, the association support the government’ plan to simplify the rules for electric cars producer, which are considered to be able to open on investment opportunities for the producer.

Written by Staff Editor, Email: theinsiderstories@gmail.com