Cheap Economy Compact Cars

Oct 6th, 2009, in Business & Economy, by

Development of a hyper mass-market automobile industry and cheap cars for as many as possible.

A number of government ministries, mainly since early 2008, have been attempting to woo international automobile manufacturers to make Indonesia their production base for the key low cost and eco-friendly car market.

This week the Deputy Coordinating Minister for Industry and Trade Affairs, Edy Putra Irawadi, said car manufacturers would be enticed to Indonesia via various tax break and other incentive schemes, provided they were willing to commit to a 60% level of local components in production.

Edy Putra Irawadi
Edy holds forth

Thailand was the traditional south east Asian base for car producers, he said, but the Thai domestic market was saturated while the 200+ million population of Indonesia should be enticing to producers particularly if, as Edy expected, the cars could be sold domestically for as little as 60 million rupiah (+/-$6,000) each.

The price might be around 60 million rupiah, they’d be very economical, and would be in line with ‘Euro 3’ emission standards.

The cheaply produced cars must be within the purchasing power of both middle and lower class people, Edy said, whether on credit or cash up front, and be environmentally friendly and super economical to run.

Tata Nano
Not as cheap as the Tato Nano, made in India, around $2000.

Edy forecasted that by 2014 between 300,000 and 600,000 such cars would be in production.

In reaction Johnny Darmawan, an office-bearer at the Association of Indonesian Automotive Manufacturers (Gaikindo) and the president director of PT Toyota Astra Motor, said, possibly wistfully

This plan was initiated by the Industry Ministry a year ago. But now that the Coordinating Ministry has become involved, it means that something might actually happen next year.

6 Comments on “Cheap Economy Compact Cars”

  1. Chris says:

    I personally quite liked the kancil (mouse-deer):

    They were supposed to replace bajaj. They were Rp50 million each but disappeared quickly because they were (not surprisingly) too expensive for bajaj drivers and not available for “private” customers.

    They don’t seem much different in terms of form and function to the Tato Nano, so maybe they could be sold off as an interim step.

    Then again, it could just make terrible traffic even worse…

  2. Stefan says:

    And where are the roads for all these cars?

  3. David says:

    Then again, it could just make terrible traffic even worse…

    And where are the roads for all these cars?

    Exactly, build more motorbike factories I say, I know plenty of people hate the motorbikes and the people who ride them but just imagine all those bikes turned into cars, madness, …. or of course public transport, but that takes colossal investment sums, and it’s not as sexy to government ministers who want multi-national car factories everywhere.

  4. Oigal says:

    As long as they are not electric than would require something like a power infrastructure within the nation

  5. Ross says:

    Yeah, Patung, anybody who travels between Kebon Jeruk and Tomang often will testify to the superfluity of more cars here.
    But what is it about bikers here? Many of them appear to be clinically insane, or at least criminally dangerous.

  6. silvestre says:

    I’d love to see em all hit a gridlock someday, when even motorbikes cant go over the pedestrian sideways to get over the trafficjams. There needs to be a revolution to solve the traffic problem, and building cheap cars arent going to be a solution, that’s only gonna make it worse.

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