Policy environment: The Indonesian government has focused on developing the automotive parts industry through the “Made in Indonesia 4.0” roadmap, and bearing products that meet local content requirements (TKDN) can enjoy a 5-year corporate income tax reduction. Starting from 2025, refurbished bearing shells must pass SNI 7279 certification before they can be circulated, and must be labeled with the “Rebuilt” logo and undergo a 200 hour bench test.
Market demand: Indonesia has a huge inventory of internal combustion engines, with over 120 million motorcycles, 32 million cars, and approximately 2 million diesel generator sets in stock. The market demand is considerable. The total size of the Indonesian bearing market is expected to reach 120 million US dollars by 2025, including approximately 45 million US dollars in OEM matching market and 75 million US dollars in after-sales replacement market. Java Island accounts for 65% of the national demand and is the main consumption area.
Technological trend: Due to the upgrade of emission regulations to EURO 4 standards, engine bushings are required to have higher high temperature resistance (≥ 150 ℃ continuous operation) and wear resistance (life ≥ 80000 kilometers), and the market share of coated bushings has increased to 35%.
Industry chain situation: Indonesia has limited local manufacturing capacity and can only produce basic aluminum based bearing shells. Precision coating and sintered copper alloy processes still need to be imported, and raw materials are highly dependent on imports. The remanufacturing industry has formed a cluster, with more than 50 engine refurbishment factories gathered around Surabaya, processing 200000 diesel engines annually and a bearing replacement rate of over 90%.
Competitive landscape: Japanese brands dominate OEM support, international giants monopolize the high-end after-sales market (AM market), and Chinese brands occupy 45% of the mid to low end after-sales market share with cost-effectiveness. Local enterprise PT Astra Otoparts supplies basic bearing shells for Toyota motorcycles and has a 65% market share in the 4S dealership channel.
Sales channels: Sales present a three track parallel pattern, with professional dealers accounting for 55% of sales, direct supply from engine remanufacturing plants accounting for 30%, and e-commerce platforms accounting for 15%. E-commerce channels are growing rapidly, with the search volume for “engine bearing” on Tokopedia increasing by 120% annually.
Chinese brand strategy: Chinese brands cope with risks through RMB settlement (accounting for 20% of transactions) and local inventory buffering. They also adopt a “semi-finished product supply+local precision processing” model to reduce tariff costs. For example, DPI reduces tariff costs by 40%, and Jinan Sanxing focuses on commercial vehicle over specification axle tiles, accounting for 25% of the PT United Tractors supply chain.
