Photo from Instagram/pt_pindad
On October 20, Prabowo Subianto was sworn in as the eighth President of Indonesia. During the day’s celebrations, Prabowo opted to shun the black Mercedes S-Class sedan frequently used by his predecessors, instead waving to crowds through the sun-roof of a custom-made all-white SUV – the MV3 Garuda. The parang batik motif on the car’s grill, and the garuda logo on the car’s wheels, contributed to the symbolism and spectacle of the inauguration.
This was repeatedly covered by Indonesian media, with one journalist calling the car “a symbol of the independence of the Indonesian nation,” demonstrating “a combination of strength, comfort, and strong national pride.”
Beyond its striking exterior, excitement around the MV3 Garuda largely derives from its local origins. The SUV is part of a new range of civilian vehicles manufactured by PT Pindad, a subsidiary of Indonesia’s state-owned DefendID Consortium, which specialises in military products.
Soon after the inauguration, it was widely reported that vehicles in PT Pindad’s ‘Maung’ range would be used by all senior Indonesian government officials. “For national pride, [and national] honour, it is best that we use our own products,” stated Prabowo, adding that “I have already planned for the large possibility that in future, all ministers, all deputy ministers, all directors-general, all office holders, perhaps at the governor, regent, [and] mayoral level, should use vehicles made by the Indonesian nation itself.”
Other government figures appeared to confirm the policy would apply to all senior officials, with Minister of the State Secretariat Prasetyo Hadi explaining that “the spirit [of the policy] is that we must have our own cars.”
This decision was lauded after its announcement. Deputy Minister of Finance Anggito Abimanyu called it an “extraordinary” policy shift. And Minister for Industry Agus Gumiwang Kartasasmita said the policy would “encourage the nation’s children to create cars based on the innovative thoughts of the nation’s children themselves.”
However, missing from most media coverage so far has been discussion of, and comparison with, a prior, ill-fated attempt to establish a ‘national car’ industry for Indonesia.
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Lessons learned from KIA-Timor project
From 1996-2000, PT Timor Putra Nasional (PT Timor), a firm led by President Soeharto’s son, Hutomo ‘Tommy’ Mandala Putra, received considerable favourable government treatment intended to help it produce a domestically-made consumer car to rival foreign imports. Government agencies and government-owned companies were required to purchase Timor vehicles, Indonesian banks were ordered to loan the company US$690 million, and the firm was awarded tax exemptions that allowed it to undercut its competitors by 50%.
Despite this preferable treatment, the project did not succeed. PT Timor was instructed to meet progressive local content requirements (LCRs) in order to boost local Indonesian manufacturing, but failed to meet these goals at any stage. In the end, through its partnership with Kia Motors, 45,000 vehicles were simply imported from Korea and rebranded as Timor cars.
At the same time, following complaints by the US, Japan and the EU, the WTO ultimately ruled that the tax exemptions initially offered to the Kia-Timor project were anti-competitive and should be withdrawn. And, as the end of the Soeharto presidency neared, Timor cars and showrooms became a target for anti-government protestors who saw the project as epitomising the government’s reputation for corruption, collusion, and nepotism’ (Korupsi, Kolusi, Nepotisme, KKN). By 2000, PT Timor had collapsed.
However, the techno-nationalist spirit that inspired the PT Timor experiment has endured in Indonesia’s automobile industry. Former President Joko Widodo gave repeated public support to local brand Esemka during his time as Mayor of Solo and as the country’s leader. And recently, Indonesia’s attempts to boost its electric vehicle industry have at times had a nationalist tinge – symbolised for example in Hyundai’s ‘Batik EV’.
As we have argued previously, together with Novia Xu and Nadya Daulay, Indonesian decision makers should carefully reflect on the lessons of the Kia-Timor project before they embark on any major new nationalist-inspired ventures in the automotive industry, and proceed cautiously and strategically.
With the emergence of President Prabowo’s plans for the ‘Maung’ vehicle, some uncomfortable parallels are worthy of note.
For one, officials’ support for PT Pindad appears to be driven primarily by an instinctive desire to bolster the country’s domestic automotive industry without any broader strategic plan. President Prabowo’s support for PT Pindad goes back at least as far as 2020 when, as defence minister, he placed an order for 500 of Pindad’s military vehicles, justifying the move on the basis that “Pindad is a domestic industry, we want to enliven the domestic industry.”
For another, just as Tommy Soeharto’s PT Timor relied on a Korean firm to supply the ‘national car’, while Maung vehicles have been portrayed as ‘100% Indonesian design’ it has been suggested that some of Pindad’s components may originate from South Korean automotive firm Ssangyong. Some have even speculated that, under the exterior, the Pindad could be based on designs for Ssangyong’s Rexton model SUV.
However, officials have stated that the local content of its vehicles is already as high as 70%. While acknowledging the many benefits of Indonesia-Korea cooperation, decision makers need to be clear and up-front on the role of foreign partners in Jakarta’s industry-building plans.
And finally, just as PT Timor struggled to establish functioning production lines within Indonesia, concerns about PT Pindad’s ability to produce Maung vehicles are already emerging. For example, Minister of State Secretary Prasetyo Hadi has stated that a commitment to all cabinet members using Maung vehicles is contingent upon PT Pindad’s production capacity. Ambitiously, PT Pindad is aiming to manufacture 5000 SUVs in the first 100 days of the administration to fulfil government demands.
Nationalist sentiment and risk of missteps
In the end, if the Prabowo administration’s experiment with a new, locally produced official car with PT Pindad is to be successful, it cannot be solely driven by nationalist sentiments. Instead, it must sit within a hard-headed, calculated and strategic approach to automotive industry building that recognises the potential for Jakarta to maximise a range of interconnected benefits around economic growth, jobs, the environment, and knowledge transfers from international partners.
Within the current global context of a resurgence of interest in industrial policy, there is much potential for Indonesia’s new president to take positive action but also – as demonstrated by the case of PT Timor – a real risk of missteps.
