Investment commitments by Indian automotive manufacturers in the Indonesian market are extending beyond vehicle supply arrangements under the Red and White Cooperative programme, encompassing a medium-term plan involving partnerships with Agrinas Pangan Nusantara and including proposed factory construction and the development of after-sales services in Indonesia by Mahindra and Tata Motors.

Joao Angelo De Sousa Mota, President Director of Agrinas Pangan Nusantara, stated that the signed cooperation contract is not solely a large-scale vehicle purchase transaction. Additional commitments are outlined in the cooperation document.

"And the plan, specifically in the contract with Mahindra, is that in addition to providing workshops and dealerships, they have also agreed, perhaps I can show you later, that by 2027 or 2028 they must build a factory in Indonesia," Joao said.

This means that Mahindra will supply units and establish supporting service facilities. Authorised workshops and a dealer network form part of the contractual obligation, addressing maintenance and spare parts availability.

"Tata itself will open a factory in Indonesia in 2029," Joao said.

Furthermore, Tata Motors is reportedly open to exploring other arrangements with TMDI (Tata Motor Indonesia) and other local channel partners within the next three years.

"This includes arrangements involving the assembly of complete knockdown or semi-knockdown units, including spare parts and components, for the promotion of the marketing and distribution of commercial vehicle sales in Indonesia," he said.

The collaboration is intended to increase local content over time.

Under the CKD or SKD model, provisions for technology transfer and employment in the automotive manufacturing sector may be included.

For Agrinas, the plan to establish a factory and an after-sales network is intended to respond to public concerns regarding the long-term servicing of Indian-made vehicles.

Joao stated that the entry of new players through direct investment could increase consumer choice and affect competition in the market.