Jakarta, CNBC Indonesia - The phenomenon of several automotive brands\nstill utilising third-party production facilities or lacking their own\nfactories in Indonesia has once again come under scrutiny. Several\nbrands that still rely on third-party facilities, such as Handal for\nproduction, include Chery, Jetour, and Jaecoo.<\/p>\n
This scheme is common in the early stages of expansion, particularly\nfor brands newly entering the national market. The government views this\npractice as a reasonable part of industrial strategy during the\ninvestment development phase.<\/p>\n
Director General of Metal, Machinery, Transportation Equipment, and\nElectronics Industry at the Ministry of Industry (Kemenperin) Setia\nDiarta considers the joint production or shared assembly approach in the\nautomotive industry as nothing that needs to be questioned.<\/p>\n
\u201cRegarding joint production, this is actually interesting; the basic\nprinciple when it comes to CKD (completely knocked down) is that it can\nutilise facilities it owns or more universal facilities,\u201d said Tata,\nquoted on Friday (24\/4\/2026).<\/p>\n
In practice, the use of shared production facilities often serves as\nan initial step before manufacturers build their own factories. This\nscheme is also seen as capable of optimising the utilisation of existing\nfacilities in the country. Additionally, this approach opens up\nefficiency opportunities for new industry players entering the\nmarket.<\/p>\n
\u201cSo, is this wrong? There\u2019s nothing wrong because the key point is to\nprovide added value to that concept. In this case, for example, for the\neconomy,\u201d said Tata.<\/p>\n
According to him, the business model in the automotive industry is\nindeed flexible and can be adjusted to each company\u2019s strategy. This\nvariation in approaches also becomes one of the factors driving new\ninvestments into Indonesia. The government sees this dynamic as a\npositive signal for the growth of the national automotive manufacturing\nindustry.<\/p>\n
\u201cThis can vary; the model can also be a choice. This is what actually\ndrives why investment companies are starting to enter,\u201d said Tata.<\/p>\n
Kemenperin emphasises that the most important aspect of every\nproduction scheme is its contribution to the national economy. As long\nas the activity creates added value, its existence remains aligned with\nindustrial policy directions. This includes promoting job creation and\nstrengthening the domestic supply chain.<\/p>\n
\u201cSo, there\u2019s actually nothing wrong with producing vehicles as long\nas it provides greater added value,\u201d said Tata.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/phenomenon-of-car-production-sharing-one-factory-ministry-of-industry-responds-1777031486", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }