DRB-Hicom to Penetrate Indonesian Automotive Market

Strategic Insights -

The Malaysian government is set to solidify its presence in the Indonesian automotive market with DRB-Hicom Bhd, a leading Malaysian conglomerate, poised to introduce its Volkswagen models, Polo and Jetta, to the Indonesian market soon. This move aligns with the government's goal of increasing exports of locally produced cars. DRB-Hicom has invested over RM1 billion in setting up an automotive complex in Pekan, a testament to the company's commitment to the industry. In related news, the International Trade and Industry Minister, Datuk Seri Mustapa Mohamed, has announced that 17 out of 22 car manufacturers have reduced their prices following the implementation of the Goods and Services Tax (GST) at 6% in place of the 10% Sales and Services Tax (SST). The government has stated that it will not intervene in the pricing decisions of the remaining five car manufacturers.

Key Takeaways:

  • DRB-Hicom is set to export 500 completely-knocked-down (CKD) units of the Volkswagen Polo and Jetta to Indonesia, assembled at the DRB-Hicom automotive complex in Pekan.
  • The export marks a significant step towards the government's goal of increasing exports of locally produced cars.
  • The government has no intention of intervening in the pricing decisions of the remaining five car manufacturers that have not reduced their prices after the implementation of GST.
  • Currently, there are no plans to reduce the exercise duty on vehicles imported into Malaysia.
  • The average car price reduction in Malaysia stands at 15.78% following the introduction of GST.
  • DRB-Hicom has invested over RM1 billion in setting up an automotive complex in Pekan.
  • The International College of Automotive (ICAM) has been established with a campus spanning 16.8 hectares and featuring state-of-the-art facilities.

Statistics:

  • 500 DKD units of the Volkswagen Polo and Jetta are set to be exported to Indonesia.
  • 17 out of 22 car manufacturers have reduced their prices following the implementation of GST.
  • The average car price reduction in Malaysia stands at 15.78%.
  • Over RM1 billion has been invested in setting up the automotive complex in Pekan.
  • 4,000 workers are employed by DRB-Hicom in Pekan.

Sources:

  • Bernama. (n.d.). DRB-Hicom To Export 500 Volkswagen Units to Indonesia Next. Retrieved from
  • Bernama. (n.d.). DRB-Hicom-Invested Campus to Boost Automotive Sector. Retrieved from