Component Industry Says National Car's Local Content Will Not Reach 100%

The government’s plan to develop a national car (mobnas) has received support from the domestic component industry, which believes the existing supply chain is sufficiently mature to realise the project. However, industry players have cautioned that the vehicle’s local content level (TKDN) will not reach 100%.

Rachmat Basuki, Secretary General of the Indonesian Automotive Parts and Components Industry Association (GIAMM), stated that the component industry is ready to support the mobnas programme. He noted that the industry already supplies various global brands and has proven its quality through exports.

‘Basically, the component industry already supplies many global brands. If the national car idea is realised, its TKDN should be high. We are ready to support it because our quality is no longer in doubt,’ Rachmat told CNBC Indonesia.

According to him, the main challenge is not building a supply chain from scratch, as the industrial infrastructure is already in place. The adjustment will focus more on the technical specifications of the vehicle to be produced.

‘What needs to be done is just adjusting the specifications. What the national car’s specs will be, what components are needed, that is something we do regularly. The supply chain in Indonesia is also quite complete,’ he said.

Despite this optimism, Rachmat acknowledged that the local content level will ultimately depend on the vehicle’s characteristics. He estimated that the TKDN would not reach 100% because some components are still not manufactured domestically and would need to be imported.

Previously, Minister of Industry Agus Gumiwang Kartasasmita revealed that the national car project is currently in the design phase. He expressed hope that the vehicle, being designed by state-owned enterprise Pindad, would have a higher TKDN than the average electric vehicle currently on the market, which ranges from 30 to 70%.

The revival of the national car issue is seen as a strategic move to catch up in the automotive industry and reduce dependence on global manufacturers. The Ministry of State-Owned Enterprises has described the project as part of an effort to build national technological independence.