JAKARTA: The national automotive industry has the capacity to produce pickup trucks domestically, the industry minister says in response to a plan by state-owned agriculture company PT Agrinas Pangan Nusantara to import 105,000 vehicles from India to supply the government’s Red and White Rural Cooperatives programme.
“If all demand for pickup trucks are met through imports, the economic value added and jobs created will be enjoyed by industries abroad,” Industry Minister Agus Gumiwang Kartasasmita said in a statement on last Thursday.
Last Wednesday, Agrinas announced its partnerships with India’s Mahindra & Mahindra and Tata Motors for a total contract value of 24.66 trillion rupiah, among the country’s largest commercial vehicle procurements in recent years.
Tata said in a press release that it would be supplying 70,000 vehicles, while Mahindra said in a separate statement that it would be providing the remaining 35,000.
Both companies described their respective orders as the “biggest” ever.
In his Feb 19 statement, Agus warned that importing a high number of vehicles risked undermining the government’s effort to protect the domestic automotive industry amid mounting global and domestic pressures by urging local companies to keep workforces “stable”.
While the local industry was yet to produce four-wheel drive (4WD) heavy-duty pickups designed for rough terrain, the minister continued, its two-wheel drive (2WD) light trucks could compete with imports in terms of both quality and standards.
The ministry estimates that supplying 70,000 locally produced 2WD pickup trucks alone would generate around 27 trillion rupiah in economic impact, taking into account related manufacturing activities for tyres, glass, batteries, metals, plastics, cables and electronics, among others.
Agrinas’ deals comprise 35,000 units each of the Mahindra Scorpio and the Tata Yodha pickup trucks, both available in 4WD and 2WD variants, and 35,000 units of the Tata Ultra T.7 light truck, typically a 2WD variant.
It remains unclear which drivetrain specifications Agrinas has ordered for each pickup model.
The import agreement has drawn scrutiny from industry players.
They argue that prioritising foreign-made vehicles for such a large order could undermine efforts to strengthen local manufacturing and supply chains, especially when the government has been promoting higher domestic content in strategic sectors.
The country can produce around one million pickup trucks out of 2.5 million four-wheel automotive vehicles per year, according to data from the Association of Indonesian Automotive Manufacturers (Gaikindo).
Some of Gaikindo’s 61 member companies already produce pickups locally, including PT Suzuki Indomobil Motor, PT Isuzu Astra Motor Indonesia, PT Krama Yudha Tiga Berlian Motor, PT SGMW Motor Indonesia, PT Sokonindo Automobile, PT Toyota Motor Manufacturing Indonesia and PT Astra Daihatsu Motor.
Gaikindo data showed that locally based manufacturers have a combined capacity to produce more than 400,000 pickup trucks per year, primarily 2WD variants, though their full production capacity has not been utilised.
Further, domestically produced pickups typically had local content exceeding 40%, Gaikindo chair Putu Juli Ardika said in a statement.
“Gaikindo members, along with supporting industries, can meet the demand, given sufficient time to fulfill the required volume and specifications,” he added. — The Jakarta Post/ANN
