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Indonesia Drives BYD's Factory Investment and Export Goals

03 Dec, 2024
Indonesia Drives BYD's Factory Investment and Export Goals

Indonesia’s economic vision took center stage at the Gaikindo Jakarta Auto Week (GJAW) 2024, where Minister of Economic Affairs Airlangga Hartarto made a pointed inquiry to BYD, the Chinese automotive giant. His question was direct: “Will the factory happen, and will it serve the domestic and export markets?”

This conversation took place at BYD’s booth, where Airlangga emphasized the importance of following through on promises. BYD, a beneficiary of government incentives, including import duty exemptions and luxury goods tax reductions, had committed to building a factory in Indonesia. These commitments were tied to the company’s inclusion in a special economic zone (SEZ) designed to attract foreign investment and spur export growth.

Airlangga made it clear that mere domestic operations would not suffice. He warned that BYD’s SEZ status could be revoked if export targets were not integrated into its plans. “If you’re not exporting, the SEZ status will be canceled,” he said during the interaction at ICE BSD City, Tangerang, on December 1, 2024.

Responding to this challenge, Liu Xueliang, General Manager of BYD Asia Pacific Auto Sales Division, assured that progress was on track. The facility in Subang Smartpolitan Industrial Zone, West Java, is set to be completed by the end of 2025 and operational immediately thereafter. Liu confirmed that the factory’s infrastructure was already under preparation, reflecting BYD’s commitment to the timeline.

The BYD facility represents more than an industrial milestone; it signifies Indonesia’s ambition to become a hub for electric vehicles (EVs) and related technology in Southeast Asia. By encouraging global players to manufacture and export from Indonesia, the government aims to bolster its EV ecosystem while creating jobs and strengthening trade balance figures.

However, the stakes remain high. Delays or unmet export targets could jeopardize both BYD’s position and Indonesia’s broader objectives in the EV sector. This incident underscores the government’s assertive approach to holding investors accountable for their promises while maintaining a collaborative stance to attract further investments.



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