Jakarta. Chinese state-owned automobile manufacturer Chery on Friday unveiled a plan to export its Indonesia-made cars to Vietnam and the Philippines.

Chery has teamed up with a local firm, Handal Indonesia Motor, for joint assembly tasks in which Chery delivers vehicle parts to Indonesia to be assembled at Handal's facility. This includes Chery’s electric vehicle (EV) model, the Omoda E5. 

Chery claimed that this EV model had met at least 40 percent of local content as required to obtain subsidies from the Indonesian government, according to Zheng Shuo, the assistant vice president of PT Chery Sales Indonesia. The same goes for its internal combustion engine cars. Shuo said that the over 40 percent local content could enable Chery cars to enjoy the import duty eliminations brought by the existing intra-ASEAN trade pact. 

“In the first or second quarter [of 2024], we will produce not only right-hand drive cars but also export-bound left-hand drive cars here [in Indonesia]. The [local content] will give us some benefits from [the eliminated] import duty since we have the trade agreement among ASEAN countries,” Shuo told B-Universe reporters on the sidelines of the Indonesia International Motor Show (IIMS) in Jakarta on Friday.

Last year, Chery announced a Rp 250 billion (about $16 million) investment to produce EVs locally alongside Handal Motor Indonesia for Indonesian consumers. Shuo hinted at the possibility of Cherry increasing its investment in Indonesia following huge demand. He, however, refused to say the exact value of the additional investment.

According to Shuo, Chery has no plans to provide completely built-up cars for the Indonesian market.

“We want to realize our commitment to the government and help boost the economy. We will deepen our localization. At the moment, importing more completely built-up cars is not [part of] our strategy,” Shuo said.

The ASEAN Trade in Goods Agreement (ATIGA) eliminates the tariffs imposed on products traded between the Southeast Asian bloc's members. As of 2020, ASEAN is virtually tariff-free, with tariffs on 98.6 percent of products fully eliminated under the ATIGA. According to news outlet VietNamNet Global, Vietnam will continue to exempt import tax on completely built unit cars from ASEAN until the end of 2027 as part of the ATIGA.