Indonesia Yearns for Greater Export Volumes

Indonesia is urging its largest local carmaker, Toyota Motor Corp., to hike its exports from the country, pointing to Australia as a good target for growth.

Last year Toyota accounted for nearly 90% of the 194,400 cars Indonesia exported, The Nikkei reports. But the country’s total shipments pale in comparison to the 1.2 million units exported by neighboring Thailand.

The Indonesia Automotive Industry Assn. targets 7% growth this year, in part by expanding shipments overseas. The trade group is suggesting its members consider Australia, which imports 1.2 million vehicles a year—but none from Indonesia.

IAIA notes that Toyota is closing its assembly plant in Australia in October, thereby becoming the last local producer to abandon that market. But Toyota says supplying Australia from Indonesia isn’t likely because the latter country has no capacity to make the large sedans demanded by the Australian market.

Sedans account for less than 3% of all car sales in Indonesia, The Nikkei says. A 30% tax on such models is largely to blame for suppressing domestic demand and damping carmaker interest in tooling up for sedans. Even if they did, most cars built in Indonesia meet only Euro 2 emission standards that are far more lax than the Euro 4 limits allowed in Australia, The Nikkei points out.