Several automotive manufacturers, including Toyota and Daihatsu, are expanding vehicle production and export operations in Indonesia as global market competition increases.

Manufacturers like BYD are also expanding electric vehicle (EV) production and preparing for higher domestic component content requirements as Indonesia targets a minimum 60% TKDN level for battery electric vehicles from 2027.

According to data from the Association of Indonesian Automotive Industries (Gaikindo), Toyota remained Indonesia's largest car exporter during the first eight months of 2026, with vehicles manufactured in Indonesia exported to more than 100 countries.

Deputy President Director of Toyota Motor Manufacturing Indonesia (TMMIN), I Nyoman Winaya, said the company is working to maintain export performance while meeting domestic demand.

"Until August 2026, exported models include the Toyota Avanza/Veloz, Raize, Yaris Cross, Fortuner, and Agya or Wigo. The Avanza and Veloz are the largest export contributors," Nyoman said, as quoted on September 30th, 2026.

TMMIN is also considering exports of the New Veloz Hybrid Electric Vehicle (HEV), although the company is currently prioritising the Indonesian market. Any future exports would depend on the requirements, characteristics and demand of individual destination markets.

"For now, we are still focusing on meeting the needs of the Indonesian market for the Veloz Hybrid. Moving forward, we remain open to export opportunities, taking into account the needs, characteristics, and demand in each market," Nyoman said.

TMMIN's factory in Karawang, West Java, has an annual production capacity of approximately 282,000 vehicles.

Daihatsu exports

Astra Daihatsu Motor (ADM), also part of the Astra Group, was Indonesia's second-largest car exporter during January-August 2026, recording an 11.2% year-on-year increase in exports. ADM Marketing Director and Corporate Function Director Rokky Irvayandi said the company's vehicles are sold in more than 60 countries across ASEAN, South Asia, East Asia, the Asia-Pacific region, the Middle East, Africa and South America. SUVs accounted for approximately 50% of exports, followed by hatchbacks at 26% and commercial vehicles at 24%.

"Approximately 60% of the company's exports are also concentrated in three countries: the Philippines with a 29% contribution, Japan with 18%, and Peru with 12%," Rokky said.

Since its establishment in 1978, ADM has expanded its manufacturing operations in Indonesia and currently operates 10 facilities, including six factories in Jakarta, Cibitung and Karawang. Over the preceding five years, approximately 70% of its production had been allocated to the domestic market, with the remaining 30% destined for export.

In 2025, ADM also planned to build a new factory in Karawang with an investment of IDR 2.9 trillion (US$ 162 million) to increase manufacturing capacity. ADM's manufacturing activities involve more than 2,000 suppliers and local micro, small and medium-sized enterprises (MSMEs). The company has a local component purchasing rate of more than 80%, while its industrial ecosystem has the potential to employ up to 1 million people.

Domestic market and export prospects

Bank Permata Chief Economist Josua Pardede said Indonesia's automotive industry has growth potential supported by domestic demand and exports, with both markets contributing to vehicle production and related industrial activity. Vehicle production also affects supporting industries, including small and medium-sized enterprises, as well as employment.

"Exports can also support the industry, as motor vehicle exports continued to grow 9.8% annually in the second quarter of 2026," Josua told a local daily on September 30th.

Josua urged the government to direct incentives and other support measures towards domestic manufacturing, linking them to industry growth, manufacturer investment and supporting industries.

"Incentives should be increasingly linked to local production, gradual increases in local content, supplier investment, research and development, job creation, and export capabilities," he said.

Automakers strengthen EV production ahead of 2027

Toyota, BYD and other automotive manufacturers are expanding EV production capacity in Indonesia as the country moves towards a 60% TKDN requirement for battery electric vehicles. Under the existing roadmap, the minimum requirement is scheduled to increase from 40% in 2026 to 60% from 2027 through 2029.

Gaikindo Secretary General Kukuh Kumara urged electric vehicle brand holders, or APMs, to establish production facilities in Indonesia. He said manufacturers participating in the government's incentive programme through 2025 had been aware of the requirements and stages for increasing domestic content.

"So, when members want to participate in the [incentive] programme, there are requirements. When you join here, the requirements are there, and they already know all about it," Kukuh said, quoted on October 1st, 2026.

Kukuh also acknowledged that manufacturers' business plans do not always progress according to their original projections. Limited sales volumes remain a challenge, while meeting the 60% TKDN requirement by 2027 could be difficult for newer EV brands entering Indonesia. Manufacturers will nevertheless be required to comply with the applicable requirement.

"Well, that's the point. If you want to enter, based on the existing regulations, it's indeed difficult. Next year, you'll have to comply with the 60% TKDN requirement. That's what many people are asking about," he said.

Indonesia's EV market has seen several new brands enter during 2026. BAW, Changan, iCar, Leapmotor, Solarky and Zeekr made their Indonesian debuts at the Gaikindo Indonesia International Auto Show (GIIAS) 2026 in August.

Farizon and SAG have also entered the commercial vehicle segment, while several Chinese manufacturers have begun establishing or expanding manufacturing operations in Indonesia. BYD is developing a factory in Subang, West Java, with an investment of approximately IDR 16 trillion (US$ 895 million). The Subang plant began operations in 2026, with local production continuing alongside efforts to increase domestic content.

Wuling operates a manufacturing facility in Cikarang, while Chery, Geely, BAIC and Jetour continue to use the assembly facilities of Handal Indonesia Motor (HIM) for domestic vehicle production. EV sales are also influencing manufacturers' production strategies and investment decisions in Indonesia.

Toyota assesses 60% TKDN readiness

Toyota Motor Manufacturing Indonesia is evaluating the readiness of its production facilities to meet the 60% TKDN requirement for EVs from 2027.

TMMIN Deputy President Director I Nyoman Winaya said the company is reviewing several aspects of its manufacturing operations and coordinating with the government and relevant stakeholders to align its plans with the applicable roadmap.

Toyota currently assembles the bZ4X electric car at its Karawang plant in West Java. According to the Ministry of Industry's Domestic Product Utilisation (P3DN) website, the bZ4X has a TKDN level of 40% and uses a 73.1kWh lithium-ion battery.

Toyota, Daihatsu and other manufacturers are continuing vehicle production and exports from Indonesia while adjusting their operations to domestic market conditions, overseas demand and local-content requirements for EVs.