Jakarta. Indonesia plans to build a national car manufacturing plant on a 412-hectare site in the industrial area of Subang, West Java, in 2027 as part of a broader industrialization strategy aimed at strengthening the country's automotive sector.

The project has been designated a national priority program and is intended to enhance domestic manufacturing capabilities, reduce reliance on imports, and deepen Indonesia’s automotive supply chain, according to the Finance Ministry's 2027 Macroeconomic Framework and Fiscal Policy document.

“The selection of this location is based on a strategy to optimize the use of underutilized state assets while supporting efficient land use for the development of a new industrial zone,” the document stated.

The government said the national car program is expected to increase value-added manufacturing, strengthen domestic supply networks, and create higher-quality jobs. Officials also expect the project to reduce vehicle imports and increase local content requirements, contributing to an improved trade balance.

However, the policy document acknowledged several challenges, including achieving production volumes large enough to be economically viable, ensuring effective technology transfer, and ultimately producing vehicles capable of competing in both domestic and international markets.

The project has already entered the pre-feasibility study and prototype pre-design stage this year. Medium-term financing is expected to come from a combination of private-sector investment and support from Danantara Indonesia, while multiple ministries will coordinate efforts to develop the broader ecosystem needed to support the initiative.

Electric Motorcycle Program
Alongside the national car project, the government plans to continue its national electric motorcycle program next year as part of efforts to strengthen the domestic automotive industry and support government operational needs.

The program focuses on the development and production of electric two-wheel vehicles for tactical and official use, with state-owned defense technology company Len Industri serving as the lead implementing agency across several ministries.

According to the policy document, the electric motorcycle initiative is expected to generate economic benefits by reducing dependence on imported vehicles and components, increasing domestic value-added production, expanding local-content requirements, and accelerating technology transfer to Indonesia’s electric vehicle industry.

In the medium term, the government expects the program to contribute more significantly to manufacturing output and job creation.

As of April 2026, approximately 3,000 electric motorcycles had been distributed nationwide under the program. Phase One has been completed, while Phase Two is in the final stage of contract implementation.

Despite that progress, the government acknowledged that the project remains at the pilot scale and will require a substantial increase in production capacity before it can deliver its full economic impact.