BMW has just launched the new 7 Series in Indonesia which is now locally produced in the country.
“We are very positive about the future of Indonesia and therefore we also see an increased potential in the luxury market,” Axel Pannes, managing director of BMW Group Asia told Reuters.
BMW’s factory in Jakarta, Indonesia, is among its 5 partner plants where the company assembles imported parts kits and adds locally made components. The German automaker has invested more than 210 billion rupiah (RM70 million) over the last 5 years to assemble BMWs in Indonesia, with the 7 series being the latest addition to its local line-up.
Building the 7 Series in Indonesia for the local market means lower tariffs on selling the luxury sedans there. It also reduces the costs of needing to ship them in from abroad and gets the vehicles into showrooms faster. On top of that, the local assembly brings investment into the country and generates employment.
BMW decision comes as the Indonesian government starts to offer incentives for companies to build cars domestically. “The aim is for them to produce here and therefore involve local suppliers,” said I Gusti Putu Suryawirawan, director-general for metal, machines, transport equipment, and electronics at the industry ministry.
Besides BMW, other luxury car companies such as Mercedes-Benz are also increasingly shifting part of their production to the country to reduce costs and distribute their vehicles more quickly to consumers.
Source: Reuters
