Indonesia’s automotive sector is entering a transition driven by AI and semiconductors, underscoring the need for advanced technology, skilled labor, and a robust supply chain to stay competitive.

To boost competitiveness, Indonesia plans to mirror Toyota’s approach to innovation, technology, human resources, and supply chains.

The government will work with industry players to improve manufacturing competitiveness, broaden export markets, and adapt to technological changes, with ongoing dialogue with Toyota on development, innovation, supply chains, electrification, and exports.

A strategic partnership between PT Toyota Motor Manufacturing Indonesia and CATL aims to develop electrified vehicle batteries in Indonesia, with a Rp1.3 trillion investment announced in April 2026, positioning Indonesia as a hub for exporting Toyota batteries from late 2026.

Indonesia has strengthened global tech ties, forging cooperation with ARM and joining the World Artificial Intelligence Cooperation Organization to integrate into the global technology ecosystem.

Toyota’s role in Indonesia’s automotive evolution is highlighted, noting the ecosystem supports over 360,000 jobs with a dense supplier network and high local content.

A triad for competitiveness—technological mastery, workforce development, and a strong supply chain—was emphasized in Nagoya discussions with automotive players and Japanese partners.

Efforts are focused on expanding into electrified vehicle value chains, including batteries, components, and recycling, supported by human resource development.

Developing workforce and supply chains is essential to complement technology mastery and help the domestic industry adapt to rapid tech changes.

Indonesia has signed 25 international trade agreements to expand market access, with IEU-CEPA ratification expected in late 2026 and implementation planned for early 2027, aimed at strengthening the sector amid global competition.

Toyota Indonesia has produced 10 million vehicles for export to over 100 countries, with the Toyota Group investing about Rp100 trillion in Indonesia.

The government is pursuing additional tech collaborations, including with PAX Silica, to boost productivity and support AI- and semiconductor-enabled automotive applications.