A record number of brands participated in Indonesia's largest auto show in Tangerang outside Jakarta. One-third of passenger car brands at the event were Chinese companies, drawn to the Indonesian market by the government's favorable policies to spur consumer adoption and local manufacturing.

Late last year Chinese automaker BYD surpassed Tesla as the world's biggest seller of electric vehicles.

But you won't find its cars in the United States anytime soon. With the Chinese auto industry facing tariffs in the U.S. and the European Union, one of its most important markets is Southeast Asia.

Of the 31 passenger car brands represented last month at the sprawling Indonesia International Auto Show outside Jakarta, about a third were from China. The vast majority of those were electric vehicles.

Striding past fashion models and huge video displays, Safik Bahsein made his way to the BYD display, where he honed in on a BYD Dolphin, which promises 300 miles on a single charge and sells for the equivalent of $26,000.

It's one of three EV models that BYD now sells in Indonesia, the world's fourth most populous country — with more than 275 million people — and the largest car market in Southeast Asia. The company's first shipment of 1,000 EVs arrived last month.

“It’s quite beautiful,” said Bahsein, 49, who works in shipping. “Compared with European cars, I think BYD has good prospects in the future.”

In his view, the quality of Chinese cars now matches those from Europe and Japan. He said he was considering buying one for his wife, though he still prefers his Tesla Model 3, which he had to have specially imported two years ago because there are no dealers in Indonesia.

AfriPrime App link:  FREE to download...

https://www.amazon.com/Africircle-AfriPrime/dp/B0D2M3F2JT

The country's car market has long been dominated by the Japanese brands Toyota, Daihatsu and Honda. But Chinese companies have been gaining ground, particularly in EVs, where Japanese automakers have lagged.

Chinese brands accounted for 43% of EV sales in the first half of 2024, according to the Assn. of Indonesia Automotive Industries.

But getting people to buy EVs has been especially challenging in Indonesia, where there are many cheaper alternatives and a dearth of charging stations. Only 17,121 EVs were sold last year — just 2% of all auto sales.

The Indonesian government has created incentives for EV buyers and set a goal of 400,000 EV sales next year. But the international data analytics firm Fitch Solutions has suggested that a more realistic expectation is 56,000 by 2028.

For Goldie Liem, 24, who recently bought a Binguo EV from the Chinese carmaker Wuling, the biggest incentive was the license plate, which exempts Jakarta drivers from road restrictions meant to cut down on traffic.

That saves her time on her daily office commute, which can take up to two hours. She said she also saves on gas, and pays about $60 a year in taxes compared with $430 for her old Mazda.

“It gets me from A to B, that’s it,” she said. “I haven’t tried to take it out of town yet, because I’m not that brave, in terms of charging stations and all that.”

It would take much more to make her husband an EV convert. They couple had come to the auto show so he could check out gas-powered BMWs.

In China, the EV industry has flourished thanks to clean energy subsidies and access to comprehensive supply chains for battery technology and vehicle manufacturing. But intense domestic competition has prompted price cuts and led automakers to look overseas for growth.

Brazil, Belgium, the United Kingdom, Thailand and the Philippines are the biggest export markets this year, according to the China Passenger Car Assn. Indonesia is among the fastest growing.

 

"Southeast Asia, specifically Thailand and Indonesia, is the beachhead, both as a market and a production base," said Lei Xing, an independent auto analyst and former chief editor of the China Automotive Review. "It's not like you’re going into Europe and competing against the Volkswagens and the BMWs. Now with the EV opportunity, Chinese brands are jumping on that."

BYD recently announced plans to build a $1.3-billion EV plant two hours from Jakarta that will begin operations in 2026, joining other Chinese brands Neta and Wuling to build electric cars in Indonesia.

It's no coincidence that Indonesia also happens to be one of the world’s leading producers of nickel and other minerals needed in EV batteries.

China has already invested billions of dollars in Indonesian nickel mines in order to procure the strategic metal. Now Indonesia is trying to attract more Chinese funding to process its natural resources and build cars at home.

In an op-ed this year for China Daily, a state-run newspaper, a senior Indonesian transportation official declared his country’s EV industry “open for business.”

The official, Rachmat Kaimuddin, the deputy coordinating minister of transportation and infrastructure, also encouraged Chinese carmakers to take advantage of the “golden opportunity” of recently announced tax incentives for international car brands producing in Indonesia.

For brands like BYD, building more facilities in other countries is a critical part of global expansion, particularly as the U.S. and EU have threatened to implement harsher policies to keep cheap Chinese models from pushing out their own domestic manufacturers.

AfriPrime App link:  FREE to download...

https://www.amazon.com/Africircle-AfriPrime/dp/B0D2M3F2JT

Last month, the EU announced tariffs of up to 37.6% on Chinese EVs. In the U.S., President Biden raised the existing 25% tariff on Chinese EVs to 100%.

BYD has also opened a plant in Thailand, and has announced investment plans for Turkey, Hungary and Mexico, which could help the automaker sidestep foreign import taxes in the U.S. and Europe on Chinese goods.

“These are very strategic locations,” said Xing, the auto analyst. “In order to be global, I think the U.S. and Europe are the last two frontiers.”

In the meantime, there is Southeast Asia. At the auto show, Ricky Aristin, 23, spent two hours browsing cars that could potentially replace his Honda Accord. The highlight was climbing into the driver's seat of a BYD Seal, an electric sedan that sells for about $44,000.

“It feels like an expensive car,” Aristin said. “It’s a good experience from the car with the lowest price.”

Nonetheless, he decided he wouldn't buy an EV until Jakarta has more charging stations.

AfriPrime App link:  FREE to download...

https://www.amazon.com/Africircle-AfriPrime/dp/B0D2M3F2JT