Indonesia Automobile Transmission Market Outlook to 2028

Indonesia Automobile Transmission Market Overview

The Indonesia Automobile Transmission Market has experienced substantial growth, this was reflected by the global automobile transmission market reaching a valuation of USD 155 billion in 2023. This growth can be attributed to the increasing production and sales of vehicles, advancements in transmission technologies, and rising consumer demand for fuel-efficient and comfortable vehicles.

The key players in the Indonesia automobile transmission market include Toyota Motor Corporation, Honda Motor Co., Ltd., Mitsubishi Motors Corporation, Hyundai Motor Company, and Suzuki Motor Corporation. These companies have established strong manufacturing bases and extensive distribution networks across Indonesia, contributing to the market's expansion.

In 2023, Toyota announced an investment of USD 2 billion in its Indonesian operations, focusing on the development and production of electric and hybrid vehicle components, including advanced transmission systems.

In 2023, the northern region, including Jakarta, held a dominant market share, driven by Jakarta's status as the economic and industrial hub of Indonesia, with a high concentration of automotive manufacturing plants, dealerships, and consumers with higher purchasing power.

Indonesia Automobile Transmission Market Segmentation

The Indonesian automobile transmission market is segmented into distribution channels like product type, vehicle type, and region.

By Product Type: The Indonesian automobile transmission market is segmented by product type into manual transmissions, automatic transmissions, and continuously variable transmissions (CVTs). Automatic transmissions accounted for the highest market share in 2023, driven by the growing consumer demand for comfort and ease of driving, particularly in urban areas with heavy traffic.

By Vehicle Type: The market is segmented by vehicle type into passenger cars, commercial vehicles, and electric vehicles (EVs). Passenger cars dominated the market in 2023 due to the high demand for personal vehicles and the increasing preference for automatic transmissions in this segment.

By Region: The market is segmented by region into North, South, East, and West Indonesia. The northern region, including Jakarta, dominated the market with the highest market share in 2023 due to its economic significance and high vehicle density.

Indonesia Automobile Transmission Market Competitive Landscape

Company

Establishment Year

Headquarters

Toyota Motor Corporation

1937

Toyota City, Japan

Honda Motor Co., Ltd.

1948

Tokyo, Japan

Mitsubishi Motors Corporation

1970

Tokyo, Japan

Hyundai Motor Company

1967

Seoul, South Korea

Suzuki Motor Corporation

1909

Hamamatsu, Japan

Honda: Honda opened a new manufacturing facility in Karawang, West Java, in 2023, with an investment of USD 1 billion. The facility focuses on producing next-generation transmission systems for both conventional and electric vehicles. By 2024, this facility is projected to produce 500,000 transmission units annually, catering to both domestic and international markets.

Mitsubishi: Mitsubishi announced an expansion of its manufacturing plant in Bekasi, West Java, in 2023, with an investment of USD 500 million. This expansion aims to increase the production capacity for hybrid and electric vehicles, including the development of new transmission systems.

Indonesia Automobile Transmission Market Analysis

Indonesia Automobile Transmission Market Growth Drivers:

Growth of the Aftermarket Services: The automotive aftermarket services sector in Indonesia is expanding rapidly, with revenue reaching IDR 150 trillion in 2023, compared to IDR 130 trillion in 2022. This sector includes maintenance, repair, and replacement services for vehicles, which drives the demand for transmission systems.

Rising Middle-Class Population: The middle-class population in Indonesia reached 70 million in 2023, contributing to the increase in vehicle ownership. The growing purchasing power of this segment is a key driver for the automobile transmission market as they seek higher quality and technologically advanced vehicles.

Expansion of Automotive Infrastructure: In 2023, Indonesia invested USD 6.2 billion in improving its automotive infrastructure, including new manufacturing plants and expansion of existing ones. Enhanced infrastructure facilitates efficient production and distribution of transmission systems, meeting the growing market demand.

Indonesia Automobile Transmission Market Challenges:

High Cost of Advanced Transmission Systems: The average cost of automatic transmission systems in Indonesia was around USD 2,500 in 2023, compared to USD 1,500 for manual transmissions. This cost difference poses a challenge for widespread adoption, especially among cost-sensitive consumers.

Dependence on Imported Components: Indonesia's automotive industry heavily relies on imported components for transmission systems. In 2023, the country imported automotive components worth USD 8 billion. This dependency leads to vulnerability in supply chain disruptions and fluctuating import costs.

Indonesia Automobile Transmission Market Government Initiatives:

Promotion of Electric Vehicles: In 2023, the Indonesian government launched an initiative to promote electric vehicle (EV) adoption, offering incentives worth IDR 1 trillion for EV manufacturers and consumers. This initiative aims to boost the production and use of EVs, directly impacting the demand for advanced transmission systems designed for electric powertrains.

Development of Automotive Industrial Parks: The government allocated IDR 2 trillion in 2023 for the development of automotive industrial parks to attract foreign and domestic investments. These parks provide a dedicated space for automotive manufacturers, including transmission system producers, to set up operations, thereby fostering industry growth.

Indonesia Automobile Transmission Future Market Outlook

The Indonesia Automobile Transmission market is expected to grow in the coming years. The market is also likely to shift towards more organized with established players and online platforms expanding their reach.

Indonesia Automobile Transmission Future Market Trends:

Advancements in Transmission Technology: The market will witness advancements in transmission technology over the next five years, with a focus on enhancing fuel efficiency and driving performance. By 2028, it is projected that 1.5 million new vehicles will be equipped with smart transmission technologies that utilize AI and Io T for enhanced performance and predictive maintenance.

Development of Lightweight Transmission Materials: The focus on reducing vehicle weight to improve fuel efficiency and performance will drive the development of lightweight transmission materials. By 2028, it is expected that transmission systems in 800,000 new vehicles will incorporate lightweight materials such as aluminium and composite alloys.
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