Export Performance Challenges Amidst the Onslaught of Global Economic Disruptions

In the midst of global dynamics, the national automotive industry strives to contribute as much as possible to export performance for the sake of a positive government trade balance. Throughout January – December 2023, Toyota Indonesia contributed more than 285,000 units of T-brand vehicles for export to 100 countries in the Asia, South America, Africa, Middle East, Australia, and Oceania regions. The optimism in the performance of electrified vehicles also recorded positive figures. The Kijang Innova Zenic Hybrid exported nearly 3,000 units, while the newly launched Yaris Cross Hybrid, in the middle of 2023, exported more than 6,400 units to international consumers. Both variants of electrified vehicles received positive responses in countries across Asia, Africa, Latin America, and the middle east.

The optimism in 2023 as a recovery period post-pandemic challenge had to face various unforeseen conditions. The ongoing global geopolitical crisis between Russia and Ukraine has had a real impact towards the disruption of the global supply chain. Transformation through the development of economic growth sources, such as down streaming natural resources, the development of battery and electric vehicle industries, sustainable inclusive digital economic development, and the development of green ecosystems, are projected to be implementable strategies.

“Throughout 2023, the global economic situation faced economic crises to combat inflation, as well as geopolitical conflicts in several countries worldwide. Although the export achievements of Toyota’s Completely Built-Up (CBU) models slightly decreased by around 3% this year compared to the achievements in 2022, we, as part of the national automotive industry, continue to strive and work hard to achieve the export of T-brand vehicles in 11 variants, including both Internal Combustion Engine (ICE) and electrified technology vehicles, with the goal of maintaining Indonesia’s position as a global production and export base. This is undoubtedly due to the support, collaboration, cooperation with the government, the community, and various supporting stakeholders,” said Nandi Julyanto, President Director of PT TMMIN. 

Veloz and Fortuner are recorded as TMMIN’s vehicles contributing to export performance, totaling more than 106 thousand units over the past year. In addition to export the whole vehicles, Toyota Indonesia also exports vehicles in the form of Completely Knocked Down (CKD) units, engines, components, and production support tools (dies & jigs). Toyota Indonesia has started local production of electrified products through the Kijang Innova Zenix and Yaris Cross hybrid variants with batteries, which are core components of this electrification technology assembled by our fellow countrymen at the Karawang Plant 1

“This year, the export potential for Toyota Indonesia’s electrified vehicles reached a total of 9,400 units. This figure indicates that, as high-tech and globally competitive export products, domestically manufactured automotive products have supported the national automotive export performance, being well-received by the international market. We have also engaged in various expansion activities to optimize export performance, such as adding export destination countries to non-traditional markets and diversifying vehicle export models, such as exporting the Fortuner cash carrier to Vietnam and the Fortuner Escort to Palau," said Bob Azam, Vice President Director of PT TMMIN.

Challenges and Export Performance Targets

2024 poses challenges as it is still overshadowed by global economic uncertainties. Indonesia is expected to be one of the supporting countries with a positive economic growth to contribute to the economic recovery. Several world institutions estimate Indonesia's economic growth at around 5%, including the IMF projecting 5%, the World Bank at 4.9%, while the Government aims for up to 5.2%. These projections are quite high when reflected against various conditions faced by Indonesia in the previous year.

“In this challenging year, we target the export performance of T-brand vehicles to match the same level as in 2023 or increase by 3% to reach the level of 300 thousand units. We are making various efforts to accelerate the export performance of the national automotive industry by introducing complete variants of electrified vehicles according to the needs of the global consumers,” expressed Nandi Julyanto.

The automotive sector in Indonesia stands as one of the pillars of the national economy, contributing up to 4% of the total Gross Domestic Product (GDP). Employment in the automotive industry's value chain, including the small and medium-sized enterprises (SMEs) in the component sector, has reached more than 1.5 million jobs.

“The national automotive industry is expected to be a priority sector supporting the economy due to Indonesia's projections and potential as a key player in the environmentally friendly Internal Combustion Engine (ICE) technology vehicle industry, as well as the promising growth of electrified vehicles. Supported by a competitive national workforce and abundant natural resources, Indonesia has a significant opportunity to become a global player in the production and export of both conventional and electrified automotive industries. The positive performance of these two technologies can also strengthen the achievement of a domestic market volume exceeding 1 million units per year, requiring government support through tax relaxation policies,” concluded Bob Azam.

TMMIN’s consistency in export performance has earned appreciation from the Customs Office through the award for “Best Exporter.” This award was presented at the Tanjung Main Service Office as part of the KPU Awards 2023 on July 5, 2023. TMMIN is recognized by the Customs Office as an exporter that complies with all regulations set forth in conducting its export business activities. Additionally, towards the end of the year, TMMIN also received two categories of awards under the Company Performance Rating Assessment Program (PROPER) from the Ministry of Environment and Forestry (KLHK) for the factories located in Sunter, North Jakarta, and Karawang, West Java. The PROPER Gold award is the first-time recognition for the TMMIN Sunter 2 factory, while the TMMIN Karawang 1 and Karawang 2 factories successfully achieved the Green PROPER in the 2022-2023 period.

Toyota Indonesia is committed to developing electrified vehicles to support the government's targets. Embracing a multi-pathway strategy, Toyota Indonesia provides a range of vehicle technology options such as Battery Electric Vehicle (BEV), Plug-in Hybrid Electric Vehicle (PHEV), Hybrid Electric Vehicle (HEV), and low-emission Internal Combustion Engine (ICE) conventional vehicles.

Toyota Brand Export Performance Achievements (Jan-Des 2023)