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Others, such as General Motors have come back to Indonesia to tap this lucrative market. However, Japanese car manufacturers remain the dominant players in Indonesia’s car manufacturing industry, particularly the Toyota brand. It is a very difficult challenge for western brands to compete with their Japanese counterparts in Indonesia, known as the backyard of Japanese car manufacturers. Safety in the automotive industry is particularly important and therefore highly regulated.

However, due to robust growth in recent years, Indonesia is expected to somewhat limit the gap with Thailand’s dominant position over the next decade. To overtake Thailand as the biggest car manufacturer in the ASEAN region will, however, require major efforts and breakthroughs. Currently, Indonesia is primarily dependent on foreign direct investment, particularly from Japan, for the establishment of onshore car manufacturing facilities.

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