South Korea’s KG Mobility (KGM) is ramping up its Indonesia strategy through a new partnership with state-owned defense company Pindad to develop Indonesia’s national car and electric bus projects.
The agreement, signed by KGM Chairman Kwak Jae-sun and Pindad CEO Sigit Santosa on May 8 in Bandung, aims to expand production capacity to 200,000 vehicles. This represents a significant escalation from KGM’s current operations in Indonesia, where it exported 1,060 Rexton knock-down kits last year and plans to ship 3,000 units in 2025.
The partnership aligns with Indonesia’s ambitions to reduce dependence on foreign automotive brands in Southeast Asia’s largest car market, which sees annual sales exceeding 1 million vehicles. Japanese manufacturers currently dominate with over 90% market share.
For Pindad, the collaboration bolsters its Maung vehicle program, which has gained prominence as President Prabowo Subianto’s official car. The Maung, with 70% locally-sourced components, has been positioned as a potential national car symbol and is expanding from military to civilian applications.
KGM, formerly known as SsangYong Motor until its 2023 rebranding under KG Group ownership, views Indonesia as a strategic growth market. “Indonesia is an attractive market with high growth potential,” Kwak noted, emphasizing KGM’s plans to leverage its product competitiveness in the region.
The partnership continues KGM’s strategy of expanding through government partnerships, following a similar agreement with Peru’s army-owned FAME enterprise in March for official vehicle supply.
