Indonesia Challenges Thailand for Regional Auto Hub Title in Pitch to Toyota
Indonesian Finance Minister Purbaya Yudhi Sadewa offers sweetening incentives to entice Toyota and its supply chain away from Thailand
- Indonesia's Finance Minister has publicly invited Toyota to move its main regional production base from Thailand to Indonesia.
- To entice the automaker, Indonesia is offering a package of sweeping investment incentives, tax breaks, and regulatory concessions.
- The proposal aims to attract not just Toyota's assembly plants but its entire supply chain, including parts and materials suppliers, to build a domestic ecosystem.
- This move is a direct challenge to Thailand's long-held position as the primary automotive manufacturing hub in Southeast Asia.
Indonesian Finance Minister Purbaya Yudhi Sadewa offers sweetening incentives to entice Toyota and its supply chain away from Thailand.
Indonesia has issued a direct challenge to Thailand’s status as Southeast Asia’s primary automotive manufacturing hub, with Indonesian Finance Minister Purbaya Yudhi Sadewa publicly calling on Toyota Motor Corporation to relocate its regional production base to Indonesia.
Speaking at the Gaikindo Indonesia International Automotive Conference (GIAC) in Tangerang, Banten, Purbaya pledged that Jakarta is prepared to grant sweeping investment incentives and regulatory concessions to persuade the Japanese carmaker to make the move.
Challenging Thailand’s Regional Dominance
Addressing industry executives, Purbaya questioned why Thailand continues to hold the position of ASEAN’s manufacturing centre despite Indonesia possessing the largest economy and population in Southeast Asia.
"We are ready to support Toyota, but we ask that you move your main production base from Thailand to Indonesia. I am prepared to offer every incentive you require," Purbaya stated, adding that Indonesia's market scale has yet to fully translate into automotive manufacturing leadership.
Purbaya acknowledged that Thailand has historically outpaced Indonesia in attracting global carmakers, citing Thailand's well-established industrial ecosystem, extensive component supplier network, supporting industries, and integrated export infrastructure.
He admitted that Indonesia had previously struggled to compete due to less attractive government incentive packages.
Targeting the Complete Supply Chain
To bridge the competitive gap, the Indonesian government is committed to streamlining business licensing, cutting bureaucracy, and implementing targeted tax and fiscal incentives.
Purbaya emphasised that these measures aim to lower setup costs and provide regulatory certainty for foreign investors expanding operations in Indonesia.
Jakarta’s ambitions extend beyond vehicle assembly. Purbaya indicated that Indonesia hopes to lure Toyota’s entire tier-one and tier-two supply chain, spanning upstream sectors including steel, electronics, chemicals, and auto parts.
Securing these supporting industries would reinforce Indonesia’s domestic supply chain, reduce reliance on imported components, and foster integrated financial and logistics services.
Neither Toyota Motor Corporation nor Thai government officials have formally commented on the Indonesian pitch. However, analysts note that while Indonesia offers a massive domestic market, shifting established automotive ecosystems away from Thailand remains a complex, capital-intensive challenge for global automakers.
Source : The Jakarta Post
