Automotive Sector Investment In Indonesia

© 2016 by Indonesia Investment Coordinating Board. All rights reserved

Automotive Sector InvestmentIn Indonesia

Lely SartikaDeputy Director for Manufacturing Industries Promotion

Prepared for EU-Indonesia Business Dialogue 2016

Jakarta – 8 November 2016

The Investment Coordinating Board of the Republic of Indonesia

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Indonesia Macroeconomic Overview

2015: 4,8%

2016: 5,2%

2015: 5,0%

2016: 5,0%2015: 5,4%

2016: 5,1%

|GDP

|Household Consuption |Gov’t Exp

2015: 5,1%

2016: 6,0%

|Investment

2015: -2,0%

2016: 0,1%

|Export

2015: -5,8%

2016: 0,2%

|Import

2015: 4,0%

2016: 3,9%

2015: -5,1%2016: 0,1%

2015: 4,3%2016: 5,2%

|Agriculture

|Mining

|Industry

2015: 1,2%2016: 2,3%

|Electricity Gas

2015: 6,7%

2016: 7,9%

|Construction

2015: 6,7%

2016: 6,8%

|Transportation

2015: 2,5%

2016: 3,4%

|Trading

2015: 10,1%

2016: 10,5%

|ICT

2015: 8,5%2016: 8,5%

|Finance

GDP Distribution

• Government consumption (9.4%)

increased significantly supported

by high expenditures.

• Household Consumption (56.4)

increased due to an increase in

activity in Ramadan and the

feast.

• Investment (32.4%) grew

steadily supported by the

sustainability of infrastructure

projects.

• Exports and imports (0.3%)

showed improvement though still

negative

20.8%13.5%

32.4%


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4.92.9

6.8

15.8

13.1

7.8

6.3

11.3

5.4

Commodity Based Sector

Manufacturing Industries

Services

15,2

10,5

9,8

9,1

8,0

7,4

7,3

6,5

4,4

4,3

2,8

2,6

2,4

2,2

2,1

5,5

Mining

Metal, Machinery and Electronics Industry

Logistics, Warehousing and Telecommunication

Chemicals & Pharmaceuticals

Transport Equipment and Other Transportation

Food Industry

Electricity, Gas and Water

Food Crops and Plantation

Paper & Printing Industry

Real Estate, Industrial Zone and Offices

Non-Metal Mineral Industry

Trading & Repairment

Construction

Hotel & Restaurant

Rubber & Plastics Industry

Other sectors

Commodity Based Sector

22%

Manufacturing Industries

48%

Services

30%

In percentage

In US$. million

In percentage

FDI in Indonesia by Sector 2011 – 2016q3

Source : BKPM, 2016, processed


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11,82,7

3,1

3,6

4,1

5,5

6,1

6,4

6,8

7,2

15,1

27,6

Other Countries

China

Hong Kong

BVI

UK

Joint Countries

Netherlands

Malaysia

US

South Korea

Japan

Singapore

In percentage

FDI in Indonesia by Country 2011 – 2016q3

Country No. of Projects

Investment Value(in US$. Mn)

Share (%)

Singapore 9,910 31.3 27.6

Japan 6,482 17.2 15.1

South Korea 6,495 8.2 7.2

The United States 1,117 7.7 6.8

Malaysia 3,133 7.2 6.4

The Netherlands 1,533 6.9 6.1

Joint Countries 2,613 6.3 5.5

The United Kingdom 1,141 4.6 4.1

British Virgin Islands 2,294 4.0 3.6

Hong Kong 1,561 3.5 3.1

China 3,092 3.0 2.7

Other Countries 9,058 2.7 11.8

Source : BKPM, 2016, processed

ASIA; 65,8EUROPE; 12,9

AMERICA; 11,2

JOINT COUNTRIES,5.

2

AFRICA; 3 AUSTRALIA; 1,8

Intra ASEAN: 34.9%


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President Jokowi:“In the future, we will focus on the

deregulation and infrastructure development in addition to the industrialization and human resources development.“

Public Dialogue by ISEIin Jakarta, 30 March 2016.


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Development Target

Investment Priority Sectors

7 + 35 GW ElectricityPower Plant

29.6 GW derived from privatewith total estimated projects

costs are USD 43 Billion

1,000 KmToll Road

2 toll road projectsto offerin 2015

3,258 Km Railways

5 projects to offerin 2015

15 NewAirports

10 airports expansion projects to offer

24 New Seaports Capacity

2 port capacity expansionto offer 2015

SpecialEconomic Zones

7 New & 10 New for Tourism

New Industrial Estates

14 estates Outside Java & 2 estates in

Java

Indonesia Investment Coordinating Board

INDONESIA INVESTMENT PRIORITY SECTOR (2015-2019)

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1 INFRASTRUCTURE35.000 MW ofPower Plants

24 Ports

2 AGRICULTURE Food Estate Corn Cattle

3 INDUSTRY

Labor Intensive TextileFood and Beverages

Furniture Footwear

ImportSubstitution

Chemical and Pharmacy

Iron and Steel Components

ExportOrientation

ElectronicsPalm Oil and

Derivative Products

Products of Wood, Paper

and PulpAutomotive

Downstream Cocoa Sugar Smelter

4 MARITIMEShipbuilding

and ShiprepairCold Storage

MarineTechnology

5 TOURISM AND ZONE

10 SpecialEconomic Zone of Tourism

8 Existing Special

Economic Zone

7 New Special Economic

Zone

14 Priority Industrial Estate and

Others Industrial

Estate

16 Tourism Priority

Destination


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Rank Country 2011 2012 2013 2014 2015 Q3 2016Total 2011-Q3

2016

1 Japan 465 1,510 3,000 1,259 1,180 1,634 9,049

2 Hongkong, PRC 13 85 56 62 156 372

3 Germany 131 35 7 1 0 174

4 United States 3 49 82 4 4 3 145

5 Singapore 1 1 112 2 1 6 123

6 Thailand 1 3 34 4 0 35 77

7 Taiwan 19 6 1 1 5 0 31

8 South Korea 2 0 2 1 9 10 23

9 India 1 1 16 2 2 0 22

10 Malaysia 2 0 0 6 11 19

Total (All countries) 638 1,690 3,309 1,340 1,403 1,943 10,324

Investment Performance

FDI Realization in Automotive SectorBased on Capex 2011- Q3 2016, in USD Million


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Rank Companies Country Investment Value

1 ASTRA DAIHATSU MOTOR Japan 868

2 SUZUKI INDOMOBIL MOTOR Japan 697

3 HONDA PROSPECT MOTOR Japan 595

4 TOYOTA MOTOR MANUFACTURING INDONESIA Japan 582

5 SUZUKI INDOMOBIL MOTOR Japan 557

6 TOYOTA MOTOR MANUFACTURING INDONESIA Japan 422

7 MITSUBISHI MOTORS KRAMA YUDHA INDONESIA Japan 294

8 HINO MOTORS MANUFACTURING INDONESIA Japan 222

9 ASTRA HONDA MOTOR Japan 171

10 NISSAN MOTOR INDONESIA Japan 149

Investment Performance

Top 10 Companies in Automotive SectorBased on Investment Values 2011- Q3 2016, in USD Million


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Automotive Industry

Scope of Industry

Business Fields KBLI/ ISIC* 2015

Four-wheels and more motor vehicle industry 2910

Four-wheels and more motor vehicle body industry and industrial trailer & semi-trailer

2920

Spare part and accessories for four-wheels and more motor vehicle industry

2930

Motorbike Industry 3091

*) Klasifikasi Baku Lapangan Usaha Indonesia/ Indonesian Standard Industrial Classification


INVESTMENT INCENTIVES ON AUTOMOTIVE SECTOR

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TAX ALLOWANCE

(Government Regulation No. 52/2011 jo. No. 18/2015)

30% of investment value

Reduction of corporate net income tax for 6 years, 5% each year.

No. Business Field KBLI* Remarks

1Automotive and automotive components industries

Open 100% for foreign direct investment

Open with Conditions

1

Nail, nuts and bolts industry, component and spare parts to start up motor industry, pump and compressor industry, componentsand two and three wheeled vehicles accessories industry, bike and becak accessories industry

30912 Partnership with local enterprise.

IMPORT DUTY FACILITY

(MoF Regulation No. 176/PMK.011/2009 jo. No. 76/PMK.011/2012 jo. No. 188/PMK.010/2015)

2 years import duty exemption or 4 years for companies using locally-produced machines (min.30%).

Machines, goods, materials for production

Which produces goods and/or certainservices.

Industries

Negative Investment List (NIL)

Tax Allowance

1 4 or more wheel vehicle industry 29100Public transportation for > 42 passengers and/or trucks

2Carosery industry for 4 or more wheel vehicle industry and trailer and semi trailer industry

29200Manufacturing of parts of car or vehicle carosery

3Manufacture of spareparts and accessories for 4 or more wheeled vehicles

29300

Engine and engine part, brake system, axle & propeller shaft, transmission/clutch systems, steering system, injector, water pump, oil pump, fuel pump, forging component, die casting component, stamping part, etc

4Manufacture of component and equipment for two or three wheeled motorcyle

30912Engine and engine part, die casting component, transmission system


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Manufacturing Labor Costs


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Source: McKinsey Report

Adding More Consuming Class


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• BKPM is the Investment Coordinating Board of the Republic ofIndonesia.

• As the primary interface between business and government,

• BKPM is mandated to boost domestic and foreign directinvestment through creating a conducive investment climate.

• Reporting directly to the President of the Republic ofIndonesia

• Agency’s goal is not only to seek more domestic and foreigninvestment, but also seek quality investments that improvesocial inequality and reduce unemployment.

• The agency works as a proactive advocate for investments aswell as a matchmaker for investors.

• Since July 2016, BKPM is chaired by Thomas Lembong or knownas Tom. Lembong.

Who We Are


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Investment Interest

Investment Licensing

Investment Realization

Investment Marketing

Indonesian Representative

Office & IIPC

Investment Problem

Facilitation

(Debottle-necking)

End-to-End Services for Investors

Indonesia Investment Promotion Centre (IIPC)in 8 Cities

One Stop Service

at BKPM

Implementation and Control


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Badan Koordinasi Penanaman Modal (BKPM)


Jln. Jend. Gatot Subroto No. 44Jakarta 12190 - Indonesia

t . +62 21 525 2008

f . +62 21 525 4945

e . [email protected]

www.bkpm.go.id

Thank You

Automotive Sector Investment In Indonesia

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