With a nominal GDP of US$1.4tr, Indonesia is the largest economy in Southeast Asia. However, the country’s automotive industry fared poorly in 2024, with the approximately 866,000 vehicles sold representing a significant drop from the Association of Indonesia Automotive Industries’ (GAIKINDO’s) initial forecast of 1.1 million. It was also considerably wide of the 1.2 million unit peak achieved back in 2013.

The recent decline of Indonesia’s new vehicle market can be traced to economic and political factors. Bank Indonesia interest rates remained around 6% for much of 2024, inhibiting consumption of high-value products like cars, and a period of unusual government instability lasted until Q4. In November, GAIKINDO was optimistic that resolutions to both at the start of 2025 would lead to a recovery, and signs of a turnaround on the horizon are manifesting.

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