# Strengthening Core Manufacturing while Embracing Electrification and Global Partnerships in Indonesia - Link: https://www.thailand-business-news.com/pr-news/strengthening-core-manufacturing-while-embracing-electrification-and-global-partnerships-in-indonesia - Published: 2026-09-15T11:18:00+07:00 - Author: PR Newswire JAKARTA, Indonesia, Sept. 15, 2026 /PRNewswire/ — **Indonesia carries one of ASEAN’s largest automotive markets, where internal combustion engine (ICE) two-wheeler and four-wheeler vehicles represent the core fleet. While electrification is gaining ground, the nation’s distinct geography and demographics require a tailored approach. To navigate this transformation, Indonesia’s leading automotive component manufacturer PT Astra Otoparts Tbk continues to support the country’s large existing ICE vehicle population while expanding its capabilities in EV components, infrastructure and international partnerships. Messe Frankfurt met with Astra Otoparts’ President Director Mr Yusak Kristian Solaeman to discuss the forces driving this transition and how Astra Otoparts’ integrated model achieves sustainable growth.** **The foundations of a secure, high-potential market** Indonesia’s economy remains a cornerstone of Southeast Asian growth, defined by a steady annual expansion rate of around five percent^([1]). This economic resilience underpins a dynamic automotive sector and provides a solid foundation for its continued development. Based on Astra Otoparts’ estimates, more than 11 million vehicles sold in Indonesia over the past 12 years remain in operation today. Despite this substantial installed base, four- wheeler ownership remains relatively low^([2]) compared with several more mature ASEAN automotive markets, suggesting room for long-term market development. This creates a distinctive automotive market shaped by Indonesia’s specific needs, while offering room for long-term growth and opportunities for foreign direct investment( FDI). Positioned at the heart of this market is Astra Otoparts. Founded in 1976, Indonesia’s leading automotive component group comprises two business segments, manufacturing and trading, 55 entities and business units, and a workforce of over 30,000 employees as of June 2026. Today, the company continues to strengthen its core automotive component manufacturing and trading businesses while expanding its capabilities through business diversification. In this interview, the company’s President Director, Mr Yusak, discussed Indonesia’s transition toward electric mobility and how Astra Otoparts’ integrated business model enables the company to strengthen its core automotive component business while capturing opportunities from evolving mobility trends and growing investment in Indonesia. **How does Astra Otoparts strengthen its core automotive business while adapting to the evolving demands of electrification? ** To remain competitive amid rapid technological changes, Mr Yusak explained that Astra Otoparts maintains a balanced strategy across its products and services, strengthening its core automotive component business while expanding its capabilities to capture emerging opportunities from electrification. The company divides its portfolio into two core categories: resilient components that remain essential regardless of powertrain type (ICE, HEV, PHEV & BEV), and common components which cater directly to ICE vehicles. Mr Yusak added that Astra Otoparts continues to strengthen its aftermarket business by addressing the replacement needs of Indonesia’s large existing ICE vehicle population. Indonesia features a mature vehicle market, averaging around 10 to 14 years old in urban areas and extending up to 20 years on the outer islands. To serve the replacement needs of this ageing vehicle population, Astra Otoparts maintains a strong aftermarket business that addresses recurring consumer demand for replacement parts across both two-wheeler and four-wheeler segments. This extensive market coverage is particularly relevant in Indonesia, which remains one of the world’s largest two-wheeler markets. To serve the vast overall vehicle population, Astra Otoparts executes a multi-brand and multi-channel strategy. This includes Astra Otoservice workshops that deliver affordable maintenance, the Shop&Drive retail chain network, and a supply chain of regional hubs, dealers, and local parts shops. Mr Yusak noted: "by managing this diverse mix, we remain resilient regardless of changes in technology or consumer behaviour." Through its balanced portfolio and extensive aftermarket ecosystem, Astra Otoparts continues to adapt to the evolving automotive landscape while building capabilities to capture opportunities arising from electrification. A prime example of this is Astra Otopower, its EV charging network. Beyond supporting the development of EV charging infrastructure, Mr Yusak mentioned that real-time data from Astra Otopower charging stations provides insights into charging usage patterns, helping the company better understand evolving customer needs and market trends, and in turn supporting the development of its long-term electrification strategy. **Navigating the realities of the electrification transitionAstra Otoparts navigates Indonesia’s evolving automotive landscape through a balanced approach that supports long-term growth and adaptability. Recognising that the transition toward electrification will evolve alongside market readiness, infrastructure development, and consumer needs, the company continues to adapt its portfolio in line with the changing automotive landscape. While the momentum behind electric mobility is growing, the transition across Indonesia presents distinct geographic and demographic challenges. As an archipelago of over 17,000 islands spanning large distances and diverse terrain, infrastructure development naturally varies by region. Mr Yusak remarked that consequently, EV adoption currently remains concentrated in major urban hubs, whereas outer islands rely heavily on traditional ICE, influenced by factors such as charging infrastructure availability, travel distances, vehicle usage patterns, and consumer needs.   Additionally, he said that EV ownership is largely seen in wealthier households buying secondary or luxury cars, while the high-volume middle class still relies on affordable ICE options. Data from Astra Otopower’s charging network reveals further consumer habits. In Jakarta, commuters buy EVs to bypass odd-even traffic restrictions, which restrict vehicle usage based on the final digit of a license plate. On the other hand, range anxiety remains a hurdle for travel outside the city. As Mr Yusak explained: "Drivers still worry about charging availability on long- distance trips; if charging stations are sparse, consumers prefer ICE or hybrid vehicles, which offer convenience because gas stations are everywhere." He added:" Electrified vehicle penetration could reach 25 to 30 percent over the next decade, with hybrid vehicles capturing most of this share. True market transformation will occur once adoption spreads beyond multi-car owners to first-time vehicle buyers." **Why are international investors choosing Indonesia? **  This gradual transition towards electric mobility combined with sustained demand for traditional and localised vehicle components, creates an ideal entry point for international players. Original Equipment Manufacturers (OEMs) and suppliers from China, Japan, South Korea, and Vietnam, including recent entrants like VinFast, are actively expanding their local presence. Mr Yusak pointed out: "Foreign investors use Indonesia as a regional manufacturing hub for exporting complete built-up (CBU) units, engines, and components for global markets." Government policy acts as a major driver for this investment. To qualify for tax facilities and incentives, incoming manufacturers must operate within local content requirements. Under the domestic content framework, known as TKDN, compliance is determined by the percentage of local content originating from domestic manufacturing, labour and raw materials^([3]). Therefore, instead of building new factories from scratch, Mr Yusak explained that partnerships with established local manufacturers such as Astra Otoparts can provide international companies with access to existing manufacturing capabilities and support more efficient localisation. "By leveraging existing production capabilities and creating manufacturing synergies, international partners can accelerate localisation while meeting applicable local manufacturing requirements." To accelerate this incoming of global capital, Astra Otoparts takes an active role:" We actively engage with government and industry stakeholders to exchange perspectives on component localisation, manufacturing competitiveness, and the development of Indonesia’s automotive ecosystem, contributing to a supportive environment for long- term investment." **Indonesia’s automotive future ** Ultimately, the country’s path towards future mobility will not be defined by an overnight EV takeover, but by a steady evolution. Supported by a stable five percent economic growth rate, strong FDI incentives, and low vehicle ownership density, the nation is positioned to become a central manufacturing and export hub for Southeast Asia. Regarding the future market outlook, Mr Yusak concluded: "Two-wheeler vehicles will remain dominant due to regional road infrastructure, although we expect advancements in trends as consumer purchasing power continues to grow. For four-wheeler vehicles, annual sales should rebound towards one million units shortly, with hybrid vehicles seeing strong adoption due to practical infrastructure requirements." Indonesia, while keeping with the direction and momentum of the global push to electrification, is paving its own path towards future mobility. For now, hybrid vehicles are seeing greater adoption driven by lower infrastructure requirements and consumer preferences outside of Jakarta. Overall, this transition provides an attractive landscape for both local and international industry players, offering high-growth opportunities not only in emerging EV and hybrid technologies, but also in supporting the enduring demand of the country’s existing vehicle fleet.  These projections further underscore the strength of Astra Otoparts’ strategy across automotive component manufacturing and trading businesses as it expands its capabilities through business diversification. By scaling alongside steady hybrid adoption and the consistent demand for two-wheeler and ICE four-wheeler vehicles, the company directly aligns with Indonesia’s economic trajectory while solidifying itself as a pioneer in Southeast Asia’s mobility innovation. **Automechanika Jakarta supporting Astra Otoparts’ goals ** Sponsoring and strategically partnering with Automechanika Jakarta directly aligns with Astra Otoparts’ vision to operate as a premier global player. Mr. Yusak highlights that "our vision is to be a world-class automotive component manufacturer, and partnering with a world- class exhibition brand like Automechanika aligns directly with that goal." Participating at the event allows the company to demonstrate domestic manufacturing leadership, display its diverse component capabilities, deepen ties with longstanding JV partners, and connect directly with international buyers seeking dependable local manufacturing partners. Automechanika Jakarta 2026 takes place from 24 to 27 September 2026 at the Nusantara International Convention Exhibition. To find out more, please visit [www.automechanika-jakarta.com](http://www.automechanika-jakarta.com/). | ^([1]) What Indonesia Needs to Achieve 7 Percent Economic Growth, Tempo English, August 10 2026, [https://qr.messefrankfurt.com/R3065](https://qr.messefrankfurt.com/R3065) | | ^([2]) [Menperin Optimistis Penjualan Mobil Tahun Ini Lampaui Target 850 Ribu Unit](https://katadata.co.id/berita/industri/6a6b371b641fb/menperin-optimistis-penjualan-mobil-tahun-ini-lampaui-target-850-ribu-unit), July 30 2026, | | [https://qr.messefrankfurt.com/P70d2](https://qr.messefrankfurt.com/P70d2) | | ^([3]) Indonesia Recasts Local Content as Investment Incentive: Key Highlights from the Ministry of Industry’s New Regulation, Makarim & Taira S., October 2025, [https://qr.messefrankfurt.com/n7262](https://qr.messefrankfurt.com/n7262) |   --- | This article was produced by Cision PR Newswire, our trusted news partner. The views expressed and the content presented here are solely those of the author and may not fully reflect the opinions of Thailand Business News. | --- **Read the original article :** [Strengthening Core Manufacturing while Embracing Electrification and Global Partnerships in Indonesia ](http://www.prnasia.com/story/archive/5047900_AE47900_0?rand=184833)