Why Japanese Cars Dominate Indonesia’s Automotive Market

TIMESINDONESIA, JAKARTA – Regardless of competition, Japanese car brands lead the Japanese car market. They have a longstanding reputation for producing the best-quality vehicles that suit the Indonesian lifestyle in every way. For this reason, Indonesians have long preferred Japanese cars over Western car-makers. This has become a problem for Western car makers. In this blog, we will discover how the Japanese entered the Indonesian market and why they became so popular in the market. 

How Japanese Cars Emerged in Indonesia

For years, Japanese used and new cars have been popular in the Indonesian market. Since 1966, Japanese cars have had a strong reputation in Indonesia for being the longest-lasting cars. You might be curious about how the Japanese entered the market and where it all began. 

So it was in 1966 when Indonesian President Soeharto wanted other countries to invest in the Indonesian market. So, Japanese car manufacturers set their assembly lines in Indonesia. Stedi Wardoyo, in their research, says that the Japanese started off by sending around 3000 vehicles and which were worth USD 13.3 million. These cars were from the most popular Japanese makes: Toyota, Mitsubishi, Mazda, Nissan, and Daihatsu. 

Then, the Indonesian government encouraged the assembly of Japanese cars locally. Since then, Japanese vehicles have been assembled in Indonesia. These vehicles were affordable than others, and this is why they have rapidly been gaining popularity. 

Why Japanese Cars Gained Popularity? 

Previously, American and European cars were the most popular among Indonesian people. However, when Japanese cars entered the market, their low price and simple car bodies attracted people of all ages. Indonesian people always prefer a car that lasts for a long over one that just looks expensive. 

Affordability and Reliability

Most people preferred a practical vehicle over one that was only a status symbol. People gradually shifted to Toyota, Nissan, and Suzuki because these cars suited their lifestyle the best. Stedi Wardoyo’s research paper states that slowly, Japanese cars became prominent, and American cars became less popular. Indonesian road conditions are very diverse, and people need vehicles that can withstand all kinds of surfaces. Japanese cars are the most long-lasting because they are carefully engineered. 

They have strong wheel traction that gives them stability on rocky surfaces. So, people in Indonesia can, without a second thought, take their Suzuki up mountains. A Japanese car has a life expectancy of 13 years, and this is also a reason why Indonesians give the Japanese brand such importance. 

Japanese Style Management (Kaizen)

The word “Kaizen” is probably very new to you. But it is definitely the backbone of Japanese cars’ popularity in Indonesia. So Kaizen is a Japanese Business Philosophy that motivates them to make small changes in business over time. This mindset ensures that the Japanese come up with the best quality and the most efficient cars. 

Toyota, the biggest-selling Japanese automaker, has adopted the Kaizen Philosophy. Wardoyo (2025) explains in his paper that the Kaizen production process management is key to the success of Japanese automotive companies in Indonesia. Kaizen Management is the backbone because it ensures the following:

• Low-cost production
• Improved quality with time
• Expanding Market with time
• Customer-Centric Approach

Adaptability 

Japanese automakers were very quick to adjust to the Indonesian terms and regulations. They collaborated with the local Indonesian companies to set up factories so that they could assemble cars. 

They also claimed a high percentage of the car body parts to be locally made. Since then, Japanese automakers that assemble their cars in Indonesia use Indonesian-made car parts. This drastically cut down the production costs and allows automakers to sell their cars at an affordable price. 

Long-Term Investment

This year marked a stepping stone for Japanese automakers’ long-term investment in Indonesia. They also received lots of benefits from the government in the form of taxes and priorities. Since then, the Japanese have definitely begun to have an edge over the American and Chinese automotive markets. 

Wardoyo (2025)’s study tells that by the year 1977, Mitsubishi had 29% of the market share, and their sales went from 1260 units to 17,400 units in less than a decade. Even today, a very significant proportion of the Indonesian market consists of Japanese car brands. 

Japanese Car Brand that Dominates Indonesia

Currently, Japanese car brands control 98.39 percent of the domestic car market in Indonesia. The following is a list of the most popular Japanese car brands:

• Toyota
• Mitsubishi
• Daihatsu
• Honda
• Nissan

 Of them, the most popular and best-selling Japanese car brands are Toyota, Honda, and Daihatsu. Now, let's look into the most popular Japanese car brands and see how they dominate the market. To begin with, Toyota has the greatest amount of sales, and rightfully so.

• Toyota

Gaikindo wholesale basis claims that Toyota sold around 85,032 units from January 2025 to April 202,5, which means that it currently has achieved 33.2% of the market share in the Indonesian market. 

This is significantly higher than the year 2024, when Toyota had 30.7% of the market share. The reason why Toyota is able to win Indonesian buyers is that it  makes sure to add local content to its cars. This strategy is what Indonesians appreciate the most. 

• Mitsubishi

Mitsubishi produces around 1 million cars in Indonesia every year. It also has its factories in the country where Mitsubishi produces cars for both domestic use and for exports. 

• Honda

Honda is very popular in the country as it comes up with new designs every now and then. It has become a statement in Indonesia.

• Daihatsu

Daihatsu is easily Indonesia’s largest car producer. It has its factory plants in various parts of the country.

• Nissan

Now Nissan is popular in Indonesia because it produces relevant vehicles that are suitable for the Indonesian climate. Indonesians favor SUVs and MPVs because of the terrain.

Why Japanese Car Brands Continue to Rule Indonesia

High Resale Value

One thing that sets Japanese car brands apart from the rest is their resale value. Japanese cars are the easiest to sell in the second-hand market due to their long life and high quality. The Japanese inspection system-Shaken ensures that the used cars are in mint condition before they can be resold. Japanese cars also depreciate at a very slow rate if you compare them to Chinese or American cars.

Diverse Car Body Types

Japanese cars have a wide product line, and that is also one of the most significant reasons for their dominance. The inventory is huge- from entry-level to top luxury segments, you’d find everything. Toyota has products for most of its segments in Indonesia. From MPVs to SUVs to Sedans, Toyota assembles all types in its Indonesian factories. 

Commitment to Green Technology

Japanese car brands like Toyota and Honda are actively producing models that align with Indonesia’s electric future. In 2013, Indonesia announced its Low Cost Green Car (LCGC) Program, which encourages automakers to make eco-friendly vehicles. Since then, Honda and Toyota have been actively making vehicles that align with the LCGC requirements. Similarly, Japanese automakers are also producing EVs and Electric vehicles to become a part of Indonesia’s Hybrid and EV Program that was introduced in 2019. Such efforts in making environmentally friendly vehicles make sure that fuel-efficient cars are accessible to all Indonesians.

Final Thoughts

We saw that Japanese cars’ dominance in Indonesia did not happen right away. It took Toyota, Daihatsu, and Suzuki years to build their trust and reliability, which Indonesians truly appreciate. It took them decades to create their standing through market-competitive prices and good-quality vehicles. Indonesia undoubtedly has a diverse network of Japanese car dealers. Many Indonesian customers prefer buying vehicles from dealers because they want to feel the experience of car ownership. If you are someone who wants to buy cheap Japanese cars from an online car dealer, then SAT Japan Indonesia is a trusted platform. Simply log onto the website and search their wide range of inventory.

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Editor

: A Nuril Fahmi