Automotive - Government pressure mounts on BYD to fulfill investment promise

Automotive - Government pressure mounts on BYD to fulfill investment promise Coordinating Minister Airlangga Hartarto has urged electric vehicle manufacturer BYD to expedite its investment plans in Indonesia. The minister's demand comes amid concerns over the company's slow progress in fulfilling its commitment to establish a local manufacturing facility. BYD has benefited from significant government incentives, including import duty exemptions and PPnBM reductions, which have contributed to the affordability of its electric vehicles in the Indonesian market. However, the government is now seeking concrete actions to ensure that these incentives translate into tangible economic benefits for the country. In response to the government's pressure, BYD's Asia Pacific Auto Sales Division General Manager, Liu Xueliang, assured that the company is committed to completing its manufacturing facility in Subang, West Java by the end of 2025. The facility, spanning 106 hectares, is intended to both meet domestic demand and serve as an export hub. While specific details about the initial production models remain undisclosed, BYD has emphasized its goal of establishing Indonesia as a major global production base. (Source : Kontan) Comment : Indonesia's concerted efforts to foster an EV ecosystem, including policy incentives and subsidies, have piqued the interest of global auto giants like BYD, Wuling, Hyundai, NETA, VinFast, Chery, Tesla and others. This influx of foreign investment underscores the country's emerging position as a key player in the global EV industry. BYD's investment commitment in Indonesia is expected to have a significant impact on the country's electric vehicle market. The availability of locally produced electric vehicles could further drive adoption and reduce reliance on imported models. Maintain our Overweight stance on the sector with ASII as our top pick.