Indonesia ADAS System Market Outlook to 2028

Indonesia ADAS System Market Overview

The Indonesia Advanced Driver Assistance Systems (ADAS) market has shown growth from 2018 to 2023. The APAC ADAS system market size was USD 19.70 billion in 2023. This growth is primarily driven by the increasing adoption of safety features in vehicles, rising awareness regarding road safety, and government regulations mandating the integration of ADAS in new vehicles.

The key players in the Indonesia ADAS market include Robert Bosch Gmb H, Continental AG, Denso Corporation, Magna International Inc., and Autoliv Inc. These companies have established a strong presence in the market through continuous innovation, strategic partnerships, and extensive distribution networks.

In 2023, a significant development in the Indonesia ADAS market was the partnership between Denso Corporation and PT Astra Otoparts Tbk to enhance the production and distribution of ADAS components. This collaboration aims to increase the local manufacturing capabilities and reduce the dependency on imports, thereby strengthening the domestic market.

Indonesia ADAS System Current Market Analysis

One of the primary growth drivers for the Indonesia ADAS market is the increasing demand for vehicle safety systems. In 2023, the government reported a 15% decrease in road accidents, attributed to the adoption of ADAS features such as lane departure warnings, automatic emergency braking, and adaptive cruise control. Moreover, a study by the Indonesian Ministry of Transport indicated that in 2024, over 60% of new vehicles sold will be equipped with at least one ADAS feature, highlighting the growing consumer preference for safety technologies.

The introduction and adoption of ADAS in Indonesia have significantly impacted the automotive industry. It has led to an increase in vehicle prices due to the incorporation of advanced technologies, but this is offset by the long-term benefits of reduced accidents and insurance costs. The market has also seen a surge in demand for skilled technicians capable of maintaining and repairing ADAS-equipped vehicles, leading to job creation and economic growth.

The Jakarta metropolitan area dominates the Indonesia ADAS market. This dominance is due to the high vehicle density, greater awareness of road safety, and higher disposable incomes in the region. Furthermore, Jakarta has seen significant investments in smart city projects, including the development of intelligent transportation systems, which support the adoption of ADAS technologies.

Indonesia ADAS System Market Segmentation

The Indonesia ADAS System Market can be segmented by various factors like Product, Sensor and Region

By Product Type: The Indonesia ADAS system market is segmented by product into In 2023, adaptive cruise control held the dominant market share under this segmentation. Its popularity is driven by its convenience and the increasing consumer preference for comfort and safety during long drives. Brands like Toyota and Honda have integrated adaptive cruise control in their popular models, contributing to the dominance of this segment.

By Sensor Type: The Indonesia ADAS system market is segmented by sensor into Radar sensors had the highest market share in 2023 due to their reliability and accuracy in detecting objects even in adverse weather conditions. The continuous innovation in radar technology and its integration in mid-range and premium vehicles have further cemented its leading position.

By Region: The North region, particularly Jakarta, holds the dominant market share. This region's dominance is attributed to higher vehicle ownership rates, greater consumer awareness, and significant investments in road safety infrastructure and smart city projects.

Indonesia ADAS System Market Competitive Landscape

Company

Establishment Year

Headquarters

Robert Bosch Gmb H

1886

Germany

Continental AG

1871

Germany

Denso Corporation

1949

Japan

Magna International Inc.

1957

Canada

Autoliv Inc.

1953

Sweden

Denso Corporation: In 2024, Denso Corporation expanded its production facilities in Indonesia to increase the local manufacturing of ADAS components. This expansion, with an investment of USD 25 million, aims to reduce production costs and improve the availability of ADAS technologies in the Indonesian market.

Magna International's Partnership with Gojek: In 2023, Magna International Inc. partnered with Gojek, Indonesia's leading ride-hailing company, to integrate ADAS features into Gojek's fleet. This partnership aims to enhance the safety of Gojek's vehicles and reduce accident rates. By 2024, over 5,000 Gojek vehicles are expected to be equipped with ADAS, showcasing the potential of these technologies in improving road safety.

Indonesia ADAS System Market Analysis

Indonesia ADAS System Market Growth Drivers

Increasing Vehicle Production and Sales: In 2024, Indonesia is projected to produce 1.3 million vehicles, significantly up from previous years. This rise in production is driven by the growing middle class and an increase in disposable income, leading to higher vehicle sales. The adoption of ADAS technologies is becoming more prevalent as automakers incorporate advanced safety features to meet consumer demand for safer vehicles.

Investment in Smart City Projects: The Indonesian government has allocated USD 10 billion for smart city projects over the next five years. These projects include the integration of intelligent transportation systems and smart traffic management, which will incorporate ADAS technologies to improve traffic flow and reduce accidents. Jakarta's smart city initiative, in particular, is expected to boost the demand for ADAS, with the city planning to deploy advanced traffic monitoring and management systems by 2025.

Collaborations and Partnerships: Leading automotive companies are forming strategic partnerships with technology firms to develop and deploy advanced ADAS solutions tailored to the Indonesian market. In 2023, PT Astra Otoparts Tbk collaborated with Bosch to develop ADAS components locally. This partnership aims to enhance the domestic production of ADAS technologies, reducing costs and improving accessibility for consumers. Such collaborations are expected to drive innovation and growth in the ADAS market over the next few years.

Indonesia ADAS System Market Challenges

High Costs of ADAS Technologies: The implementation of ADAS features in vehicles significantly increases production costs. This high cost can be a deterrent for price-sensitive consumers, limiting the adoption of these advanced safety systems. The automotive industry must find ways to reduce these costs through economies of scale and technological advancements.

Lack of Skilled Technicians: The maintenance and repair of ADAS-equipped vehicles require specialized skills and training. In 2024, the Indonesian automotive industry faces a shortage of skilled technicians capable of handling these advanced systems. This shortage poses a significant challenge to the widespread adoption and effective utilization of ADAS technologies.

Infrastructure Limitations: The effectiveness of ADAS technologies is heavily dependent on infrastructure such as well-marked roads and reliable traffic signals. Many regions in Indonesia, especially rural areas, lack the necessary infrastructure to support the full functionality of ADAS features. highlighting the need for significant infrastructure development to support these advanced systems.

Indonesia ADAS System Market Government Initiatives:

Subsidies for ADAS Implementation: In 2024, the Indonesian government introduced subsidies for automotive manufacturers to encourage the integration of ADAS features in new vehicles. The government has allocated USD 50 million to support these subsidies, aiming to make ADAS technologies more affordable for both manufacturers and consumers. This initiative is expected to drive the adoption of ADAS, improving road safety across the country.

Tax Incentives for ADAS Components: To boost the domestic production of ADAS components, the Indonesian government has introduced tax incentives for companies investing in ADAS technology development. In 2024, companies investing in ADAS R&D received tax breaks amounting to USD 20 million. This initiative aims to attract more investments in the ADAS sector, fostering innovation and reducing dependency on imported components.

Enhanced Road Safety Regulations: The Indonesian government has revised its road safety regulations, mandating the inclusion of specific ADAS features in all new vehicles by 2025. In 2024, the government enforced regulations requiring automatic emergency braking and lane departure warning systems in new passenger vehicles. This regulatory framework is expected to drive the adoption of ADAS technologies, enhancing road safety across the country.

Indonesia ADAS System Market Future Outlook

The Indonesia ADAS System Market is expected to continue its growth in the coming years. The market is also expected to see a shift towards more organized retail, with established players and online platforms expanding their reach.

Future Market Trends

Adoption of AI and Machine Learning in ADAS: The integration of AI and machine learning in ADAS technologies is anticipated to revolutionize the market. These advancements will enable ADAS systems to become more accurate and efficient, enhancing vehicle safety and driving experience. By 2028, it is estimated that over 70% of new vehicles in Indonesia will feature AI-driven ADAS systems, significantly improving road safety.

Increased Focus on Autonomous Vehicles: The Indonesian government and automotive industry are expected to increase their focus on developing autonomous vehicles over the next five years. Pilot projects for autonomous vehicles are already underway in major cities like Jakarta. By 2028, it is projected that semi-autonomous vehicles will become more prevalent, with advanced ADAS technologies forming the backbone of these systems, driving market growth.
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