Chery Automobile said it planned to make Indonesia a major a manufacturing hub in south east Asia, targeting exports to neighbouring countries as well as local sales.

The automaker currently assembles the Tiggo and Omoda 5 at a plant in Pondok Ungu in Bekasi, a city east of Jakarta, owned by contract assembler PT Handal Indonesia Motor. Last year the company invested IDR250bn (US$16m) to launch assembly of the Omoda 5E battery electric vehicle (BEV) which began in December.

The local price of the Omoda 5E is IDR499m (US$31,900), including an incentivised BEV sales tax of 1% compared with the standard 11% applied to internal combustion engine (ICE) vehicles.

The company said it aimed to increase local content to above 40% within two years the key threshold which classifies vehicles as locally made rather than assembled from imported completely knocked down (CKD) kits.

PT Chery Sales Indonesia executive vice president Qu Ji Zong said his company had agreed a five year investment plan with the Indonesian government without revealing the amount.

Zong also said his company planned to export vehicles to several neighbouring countries, including Thailand, Vietnam and the Philippines: “Indonesia will be the first country in south east Asia to export Chery cars.”

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By GlobalData

Chery was also expected to announced plans to produce BEVs in Thailand in the coming months.