The Indonesian automotive market is witnessing speculation regarding American auto giant Ford's plans to re-establish a local production base there.

RMA Indonesia, Ford's current authorised agent (APM), is reportedly exploring various strategic options, including localisation initiatives. This move comes as competition in the light commercial vehicle and sport utility vehicle (SUV) segments - categories in which Ford competes through the Ranger and Everest models - continues to increase with the arrival of new competitors. Government incentives for domestically assembled vehicles are also attracting manufacturers.

When asked to confirm investment plans and the readiness of a local assembly plant, the management stated that all considerations remain under review.

Roelof Lamberts stated that the company is currently conducting a study regarding the implementation of completely knocked-down (CKD) facilities in Indonesia. CKD facilities are intended to improve price competitiveness through import tax efficiencies and the use of local components (TKDN).

However, the decision to establish an independent assembly line requires assessment of long-term sales volume projections and domestic market conditions.

While the company has not disclosed a timeline or details regarding potential manufacturing locations, RMA Indonesia stated that it would provide updates regarding Ford's business plans in Indonesia.

"We will provide an update to our media colleagues as soon as there are further developments that we can share," said Roelof when contacted recently. Previously, Roelof stated that RMA and Ford were exploring the possibility of assembling vehicles in Indonesia. However, discussions were still at an early stage.

He further added that several parties remain engaged in discussions to assess the feasibility and potential of domestic assembly operations for Ford vehicles. In addition to establishing its own facility, Roelof stated that the company has not ruled out the possibility of using assembly facilities owned by other companies.

Currently, Ford's presence in Indonesia relies on models imported as completely built-up (CBU) units. The potential return of local assembly completely knocked-down (CKD) operations is expected to reduce vehicle prices and support consumer confidence in Ford's long-term presence in the Indonesian automotive market.