Jakarta. A senior government official on Wednesday urged Chinese carmaker Chery to build its own manufacturing facility in Indonesia and increase the use of locally-produced components to strengthen its presence in the country.

Chery has been assembling vehicles in Indonesia since 2022, utilizing a facility owned by local company Handal Indonesia Motor, which has an annual production capacity of 10,000 units.

“By establishing its own assembly plant, Chery can increase production capacity, expand its export market beyond ASEAN, create more jobs, and contribute significantly to national economic growth,” Vice Industry Minister Faisol Riza said during a visit to the Handal Indonesia Motor assembly plant in Bekasi, West Java.

Faisol commended Chery for achieving 40 percent local component usage in its vehicles but encouraged the company to aim for 60 percent to further support the local economy.

“The government is committed to ensuring the growth of the automotive sector through favorable regulations and incentives, including tax benefits for electric vehicles,” Faisol added.

The Bekasi plant produces several Chery models, including the Omoda E5, an electric vehicle that became Indonesia’s best-selling EV in the first half of 2024. Chery has stated that the Omoda E5 meets the government’s minimum 40 percent local content requirement to qualify for EV subsidies.

In 2023, Chery announced an investment of Rp 250 billion (approximately $16 million) to manufacture EVs for the Indonesian market.