Indonesia’s National Car Project, launched under President Prabowo Subianto, represents a significant industrial ambition. The initiative begins with a 60-hectare site in Subang, West Java, where PT Pindad will oversee production of 50,000 vehicles annually. Long-term plans envision expansion to 539 hectares, with output rising to 300,000 units per year. The government’s involvement, particularly through the Ministry of Defense, underscores the project’s strategic importance—not only as an economic venture but as a matter of national resilience and technological independence. Facilities will include production plants, engineering centers, and testing grounds, while the first phase is expected to generate around 2,000 jobs.

Placed in a regional context, Indonesia’s move is both ambitious and fraught with competitive pressures. Thailand has long been Southeast Asia’s automotive hub, with a well-established supply chain and strong foreign investment. Its government has aggressively incentivized electric vehicle (EV) production, positioning Thailand as a leader in the regional EV transition. Vietnam, meanwhile, has taken a bold global approach through VinFast, which is not only producing EVs domestically but also targeting international markets in the U.S. and Europe. This outward-looking strategy gives Vietnam a branding and technological edge that Indonesia will need to match if it hopes to compete beyond its borders.

Australia presents a different kind of competition. While it no longer manufactures cars at scale, it is investing heavily in EV battery production and critical minerals such as lithium and nickel. This makes Australia a strategic supplier rather than a direct rival, but one whose role in the regional automotive ecosystem could be decisive. Indonesia, with its own mineral wealth, could benefit from collaboration rather than competition here, aligning its car project with Australia’s battery supply chain to strengthen its EV ambitions.

China, of course, looms largest. With unmatched production capacity, advanced EV technology, and a global export network, China sets the benchmark for automotive competitiveness. Any Southeast Asian national car project must contend with China’s dominance, not only in terms of scale but also in innovation and branding.

From a strategic perspective, Indonesia’s project is a bold assertion of industrial sovereignty. Its strengths lie in a large domestic market, government backing, and the potential to integrate local supply chains. Yet the risks are clear: if Indonesia does not pivot quickly toward EVs, it risks being outpaced by Thailand and Vietnam, both of which are already positioning themselves as EV leaders. The opportunity lies in leveraging ASEAN trade frameworks and collaborating with Australia on battery supply, thereby carving out a niche in the regional EV ecosystem.

Indonesia’s national car project is less about competing head-to-head with China and more about ensuring it is not left behind in Southeast Asia’s automotive transformation. Success will depend on whether Indonesia can move beyond traditional combustion vehicles and embrace EV innovation at scale. If it does, the project could transform Indonesia from a consumer market into a genuine automotive producer, reshaping the balance of industrial power in the region.

This scale of production will have a direct impact on the economy through job creation, supply chain development, and the stimulation of related industries such as steel, electronics, and logistics. The first phase alone is expected to generate 2,000 jobs, but the multiplier effect across supporting sectors could be far greater, creating tens of thousands of indirect employment opportunities.

The economic impact extends beyond jobs. A national car project can foster technological transfer, encourage domestic innovation, and reduce the outflow of capital spent on imported vehicles. Through this channel of nurturing local suppliers and engineering talent, Indonesia could gradually in the long run, build a competitive ecosystem that strengthens its industrial base. This would also enhance resilience against global supply chain disruptions, a lesson underscored during the pandemic years.

However, production capacity alone does not guarantee success. For the project to be viable, Indonesia must ensure that the vehicles produced actually reach consumers. This requires a multi-pronged strategy: affordable pricing to appeal to the domestic market, financing schemes to make ownership accessible, and marketing campaigns that build national pride around the product. Beyond the domestic market, Indonesia must also look outward. ASEAN trade agreements provide a natural export pathway, but competition will be fierce. Thailand’s established automotive hub and Vietnam’s globally ambitious VinFast are already positioning themselves as leaders in electric vehicles. If Indonesia remains focused on traditional combustion engines, it risks being overshadowed.