Indonesia’s Finance Minister Purbaya Yudhi Sadewa has urged Toyota to move its regional manufacturing hub from Thailand to Indonesia, saying Jakarta is prepared to offer incentives to make the country a more competitive production base.
Speaking at the Gaikindo Indonesia International Automotive Conference (GIAC) in Tangerang, Banten, Purbaya said Indonesia wanted Toyota to establish its main manufacturing base in the country.
“We will support Toyota, but bring your main manufacturing base from Thailand to Indonesia. I will give you whatever incentives you want,” Purbaya said, according to Indonesian media reports.
Purbaya questioned why Thailand remains the region’s automotive manufacturing hub despite Indonesia being Southeast Asia’s largest economy and most populous country.
“We are the largest country in Southeast Asia. Why is the region’s automotive manufacturing hub in Thailand?” he said.
Thailand has built a strong automotive industry over several decades, supported by a large network of parts suppliers, supporting industries and export infrastructure. The country has become a major production and export base for Japanese automakers, including Toyota.
Purbaya acknowledged that Thailand has historically been more successful than Indonesia in attracting automotive investment. He attributed part of the gap to Indonesia’s less competitive investment incentives.
Jakarta is now seeking to close that gap by simplifying business licensing and offering more competitive incentives to automotive manufacturers, he said.
The government also wants to attract Toyota’s broader supply chain, including manufacturers of steel, electronics, chemicals and automotive components.
Purbaya said developing these upstream industries would strengthen Indonesia’s domestic supply chain and reduce the country’s reliance on imported components.
Indonesia already hosts Toyota production facilities and a network of automotive suppliers. However, the government wants to expand the country’s role in regional vehicle manufacturing as it competes with Thailand for new investment, particularly in electric vehicles and related industries.
