Strange Phenomenon: Factory Capacity Declines - Imported Commercial Vehicles Flood Indonesia
Jakarta, CNBC Indonesia - The national commercial vehicle industry is beginning to show signs of pressure that can no longer be ignored. Amid efforts to strengthen competitiveness, the latest dynamics are heading towards an imbalance between production and market needs.
Secretary General of the Ministry of Industry, Eko S.A. Cahyanto, highlighted the correction in production performance in recent times. He assessed this change as an early signal that needs to be heeded by all industry players.
“Based on GAIKINDO data, the performance of national commercial vehicle production in 2025 experienced a correction of 3.5 percent, from nearly 170,000 units in 2024 to 164,000 units,” said Eko at GIICOMVEC JiExpo Kemayoran, Wednesday (8/4/2026).
This decline not only impacts production figures but also reflects challenges in absorbing industry capacity. This situation shows unused room that has not been optimally utilised by domestic industry players.
“This condition has caused the utilisation rate of our commercial vehicle industry to drop to 58 percent of the total installed national capacity, thus falling below the minimum threshold for economies of scale in the motor vehicle industry,” Eko stated.
Strange Phenomenon
Amid this condition, changes are starting to appear on the domestic demand and supply side. This shift is noteworthy because it differs from the patterns that have occurred in the industry so far.
“In addition to production developments, there is a more fundamental dynamic in the last two years, namely the emergence of an imbalance between domestic production and national sales or production-sales imbalance,” Eko said.
For several years previously, the domestic industry was able to maintain a balance between production and market needs. However, this condition is now starting to change along with recent field developments.
“Throughout the period from 2017 to 2023, domestic production capacity was consistently able to meet, even exceed, domestic market needs. However, since 2024, this pattern has begun to shift,” Eko said.
This change is increasingly evident in the industry’s achievements throughout last year. Data shows a discrepancy starting to emerge between production capacity and market needs.
“In 2025, the performance of the national commercial vehicle industry showed a discrepancy between sales and domestic production of around 4,000 units,” he revealed.
This means products from abroad are entering to fill the supply. This is concerning because it occurs when domestic capacity has not been fully utilised.
“Where domestic market needs are not fully met by domestic production and are instead filled by imported products,” he said.
This phenomenon is considered quite contradictory to the available production capacity condition. This situation shows an imbalance that needs to be addressed immediately.
“Ironically, this situation occurs amid production utilisation still below 60 percent,” Eko said.
The government sees this condition as a strong signal for the need for structural improvements in the commercial vehicle industry. Collective steps are deemed important so that the balance between production and demand can be maintained again.
“This development shows the existence of a domestic supply gap, which we need to respond to together immediately through strengthening the industry structure,” he stated.