Indonesia – VW to set up a local manufacturing unit

Posted on: Aug 20, 2013 - 8:32pm IST

Indonesia is the second largest auto market in South East Asia and is growing every year. So it’s only natural for an ambitious global automaker like Volkswagen to consider setting up a manufacturing facility in the country.

Five door VW UP! front
The VW Up! could be an LCGC contender if VW sets up a facility in Indonesia. A family MPV is a must for the Indonesian operations to grow.

Indonesia’s industry minister Mr. MS Hidayat told media –

It [VW] has carried out in-depth research to understand our market, its competitors, efficient selling price and other things. With its proposed plan, it means it’s ready for competition.

However the minister stopped short of mentioning the scale of investment or location. He added that the VW officials would be coming back a week later to make a formal announcement of their plans for Indonesia.

The Indonesian government’s Low Cost Green Car (LCGC) program has prompted many automakers to set up a shop in the country since the scheme mandates local production. If VW sets up a production plant, there are good chances the German automaker will participate in the LCGC program with VW Up! being a likely contender. SUV and MPV variants on the Up! platform are also excellent product options considering that the top 5 best selling vehicles in Indonesia are from the utility vehicles category.

Just like in India VW would be looking to play at the premium end of the market. Indonesia would be important for VW to achieve its ambition of becoming the world’s largest automaker.


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One thought on “Indonesia – VW to set up a local manufacturing unit

  1. Veer says:

    Asians like to be family oriented and usually they prefer MUV or SUV with seven/eight seats. I think we still missing an Complete option against Innova which is a good MUV. So it is steeply priced for the product. Hope VW gets an Budget MUV and a SUV for us as well on a solo platform to cost competitively along with Taigun which may give good volumes if priced right and enough space is provided inside. (1.5 lt. diesel if coming as rumoured, could do a lot benefits to company as well to customers to get a refined /powerful engine.)


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About the Author
Nithyanandh K

As a toddler, those wheeled machinery fascinated me even before I knew what they’re called as! So here I'm, petrolhead by birth, Mechanical engineer by qualification and automotive reporter by profession!