Is Indonesia going to take over?


Reports of much glee from Indonesia, as their country took over from Thailand as the largest automotive market in SE Asia in 2011.  Perhaps on paper that might be so, but the Frost and Sullivan report just overlooks the fact that for almost three months at the end of the year, Thailand’s production was almost universally at a stand still after the devastating floods on top of Japan’s tsunami.  Honda for example had zero production and is still not in full swing.

However, Indonesia is having itself on if it thinks it can out do Thailand in the big production stakes.  Indonesia can continue to expand its local domestic market with the cheaper end of the automotive sales spectrum, but will never be considered the Detroit of Asia.

Indonesia also has to meet the oncoming domestic unrest in the wage earners, who have had very low wages compared to other countries in SE Asia.  Thailand is currently between B. 200-300, whilst Indonesian workers are getting between B. 100-200.  Industrial unrest is on the horizon, and many think that Indonesia does not have the necessary infrastructure or HR expertise to meet the problems.


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