Ministry of Industry Encourages Chery to Build an Independent Factory in Indonesia

KatadataOTO – The government continues to encourage various automotive manufacturers to increase domestic investment. One of these efforts is the construction of factories in Indonesia to boost the Local Content Level (TKDN).

Several brands are still using other facilities. Such as Chery, which collaborates with PT HIM (Handal Indonesia Motor) to locally assemble a number of its models.

For example, the Chery J6 SUV (Sport Utility Vehicle) which was recently launched. It was mentioned that the model's local content level has reached 40 percent.

However, the Ministry of Industry is confident that this figure can be increased to 60 percent and urges Chery to build its own facility.

Photo : KatadataOTO

Currently, the production capacity for Chery models at the PT HIM factory is 10,000 units per year since 2022. Therefore, it would be better if Chery had its own independent facility.

“With an independent factory, Chery will not only be able to increase production capacity and expand its export market beyond ASEAN, but also create new jobs in Indonesia and boost national economic growth,” said Faisol Riza, Deputy Minister of Industry, in his official statement, quoted on Wednesday (8/1).

He emphasized that a number of models already produced by Chery, including the J6, have a great opportunity to compete in the global market.

“In principle, the government encourages the automotive industry to continue improving through both regulations and incentives. This includes government-borne VAT (PPN DTP) and luxury goods sales tax (PPnBM) incentives, which are partly intended for electric cars,” said Faisol.

According to a statement from the Ministry of Industry, throughout 2025 Chery is ready to introduce new models, including a line of environmentally friendly vehicles.

This includes the Tiggo 7 PHEV, Tiggo 8 PHEV, and Tiggo 9 PHEV. Concurrently, the Chery Group's sub-brand, Jaecoo, will also be introduced to complement the range of plug-in hybrid electric vehicles in Indonesia.

Chery Plans to Build a Factory by the End of 2025

On a separate occasion, PT CSI (Chery Sales Indonesia) revealed that it has surveyed a location for Chery's independent assembly facility.

Photo : Chery

“Perhaps the groundbreaking will be in 2025, the timing is still flexible,” said Zeng Shuo, Assistant President Director of PT CSI in South Jakarta some time ago.

Nevertheless, he emphasized that the collaboration with PT HIM is likely to continue due to several considerations. For example, the production of left-hand drive models for the export needs of the Omoda E5.