Jakarta. Industry Minister Agus Gumiwang Kartasasmita said on Thursday that a number of Japanese-brand car dealerships have shut down or shifted their business models as competition intensifies from Chinese electric vehicle (EV) manufacturers.

Some dealers have closed altogether, while others have pivoted to selling Chinese EVs to keep pace with changing consumer demand, Agus told reporters in Jakarta.

“This is a challenge for Japanese car brands, as it all comes down to market demand. They need to adjust to current consumer needs in Indonesia,” he said, without specifying how many dealerships have been affected.

Agus said Japanese automakers should better anticipate shifts in Indonesia’s automotive market, which is increasingly embracing electric vehicles. Government policy is also accelerating the transition toward EV adoption as part of efforts to reduce reliance on fossil fuels and meet the country’s net-zero emissions target by 2060.

“Japanese manufacturers must recognize that our policy direction is toward accelerating EV adoption,” he said. “This is also a direct directive from President Prabowo Subianto for Indonesia to move toward full electrification of vehicles, including motorcycles, cars, trucks, and buses.”

On the same day, President Prabowo inaugurated an electric bus and truck assembly facility operated by VKTR Teknologi Mobilitas in Magelang, Central Java, underscoring the government’s push to expand domestic EV production.

Electric vehicle sales in Indonesia have surged, rising from around 43,000 units in 2024 to nearly 104,000 units in 2025. Several Chinese manufacturers have introduced EV models priced below Rp 300 million ($17,500), significantly expanding consumer access.

Around 10 EV manufacturers from China, South Korea, and Vietnam have entered the Indonesian market and established local assembly operations. Chinese brands, in particular, have gained traction by offering competitive pricing alongside advanced technology and features.

Japanese automakers are among those feeling the pressure. Honda, for instance, has seen sales decline steadily, from more than 128,000 units in 2023 to about 103,000 in 2024, and further down to 71,000 units in 2025 — below its performance during the 2020 pandemic.