China Produces 30 Million Automotive Components a Year — What Can Indonesia Do?

The national automotive component industry’s competition does not only come from fellow regional producers. Industry players acknowledge that the biggest challenge currently comes from China, which has a far larger production capacity, enabling it to offer more competitive prices.

The difference in production scale is the main factor making Chinese component prices difficult to rival. This situation also affects the competitiveness of the Indonesian component industry, both in the domestic and export markets.

‘For automotive components, we have to compete with China. They produce around 30 million cars, while Indonesia’s production capacity is around 1.3 million units. Because the volume is so large, the component prices become very competitive. That is what we have to face,’ said GIAMM Secretary General Rachmad Basuki to CNBC Indonesia on Friday (17/7/2026).

Indonesian component products have actually been accepted in various countries. However, the Chinese market remains a challenge because price competition is extremely tight.

‘We can export to America, Japan and other countries. But exporting to China is indeed difficult because of price competition. On the other hand, many Chinese products also enter Indonesia at low prices, not only automotive but various other products as well,’ he said.

Rachmad assessed that the competitiveness of Chinese industry is worth studying as a reference for national industrial development. According to him, the combination of competitive prices and product quality is one of the keys to their success in the global market.

‘What we need to learn is how they can produce cheap products with good quality, which can then be exported to many countries. That is actually what we want to emulate,’ he said.