SGMW Motor Indonesia, a local joint venture between the United States's General Motors and China’s SAIC Motor and Wuling Motors, inaugurated its first manufacturing facility in Indonesia on Tuesday (11/07). (B1 Photo/Herman)

American-Chinese Joint Venture Opens First Car Factory in Indonesia

JULY 11, 2017

Jakarta. SGMW Motor Indonesia, a local joint venture between the United States's General Motors and China’s SAIC Motor and Wuling Motors, inaugurated its first manufacturing facility in Indonesia on Tuesday (11/07), marking the beginning of the parent companies's four-year plan to take a slice of the second largest car market in Southeast Asia.

SGMW will make Confero S, a seven-seater multi purpose vehicle which will compete head-to-head with perennial Indonesian favorites Avanza and Xenia, produced by Japanese car-makers Toyota and Daihatsu respectively.

"The construction of Wuling Motors' first factory outside of China demonstrates our strong and long-term commitment to enter the Indonesian market. With a total of 3,000 local workers, we are ready to contribute to the growth of the Indonesian economy, especially the automotive industry," SGMW Motor Indonesia President Xu Feiyan said at the opening of the SGMW factory in Cikarang, an industrial zone just outside Jakarta on Tuesday (11/07).

Xu said the ​​60-hectare plant in Cikarang comprised two main facilities roughly of equal size, a manufacturing plant and a supplier park. The factory has a production capacity of 120,000 cars per year.

SAIC has a controlling 50 percent stake in the joint venture. GM has 44 percent and Wuling the rest. The companies invested $700 million to build the new factory.

SGMW will also be working with around 20 local component manufacturers and 15 international component makers that Wuling brought to Indonesia to set up shop and supply its factory here. Xu said the company plans to work with more local component suppliers in the future.

"As we can now commence mass production, we will be launching our first product in the very near future," Xu said.

The company is showcasing the Confero S at the 2017 Jakarta Fair expo from June 9 to July 16. The basic Confero S model is sold for Rp 130 million ($9,700).

SGMW said earlier it wants to control 10 percent of the Indonesian car market by 2022. 

Indonesian manufacturers sold 1.06 million cars last year, behind neighboring Thailand's 1.9 million. Local carmakers are expecting car sales to rise just slightly to 1.1 million this year, as Indonesian customers's purchasing power is unlikely to recover to full strength this year.

Toyota is the market leader in the Indonesian automotive industry, with a market share of 36 percent.