Gaikindo Explains Why Malaysia Has Overtaken Indonesia's Vehicle Sales

Jakarta — Vehicle sales in Malaysia surpassed Indonesia in 2025, ending Indonesia’s long-standing position as the largest automotive market in Southeast Asia (ASEAN). According to data from the ASEAN Automotive Federation (AAF), Malaysia’s vehicle sales reached 820,752 units, whilst Indonesia recorded 803,687 units, representing a 7 percent year-on-year decline.

This represents a dramatic reversal from 2024, when Indonesia still led the regional automotive market with 865,720 units sold, compared to Malaysia’s 816,747 units.

Gaikindo leadership attributed the shift to declining consumer purchasing power in Indonesia. “When we look at ASEAN, some markets are growing and others are declining. From Gaikindo’s perspective, this depends heavily on precise and measured government policies,” said a representative from the industry body. “Malaysia has grown and overtaken us because our purchasing power has declined. Previously, we competed closely with Thailand; now we are in second place.”

Despite the setback, Gaikindo officials maintain that Indonesia’s automotive industry foundation remains reasonably robust. Government programmes aimed at increasing local content and domestic component ratios (TKDN) have contributed significantly to building the national automotive industrial base. “Our programmes are actually quite good, ranging from domestically produced vehicles to increased local content. What is most needed now is how to maintain this automotive industry ecosystem, or ideally enhance it,” the representative explained.

Gaikindo’s daily chairman, Anton Kumonty, noted that the organisation had compared various automotive incentive schemes across ASEAN countries. He highlighted Malaysia’s consistent support for national vehicles as particularly effective, allowing them to capture a substantial market share. “We compared incentives across ASEAN countries. One policy we observed from Malaysia is that they provide consistent incentives to national vehicles, giving them a significant market share,” Anton stated.

Additionally, Malaysia’s incentive approach is more general in nature and does not overly differentiate between vehicle technology types. “Their approach is more general and does not heavily distinguish vehicle technology. This is a consistent policy they have applied since the COVID-19 pandemic period,” he added.