Abstract:
The investments and market expansions into foreign countries have been some of the
major strategies for growth by multinational companies. This paper looks into the
investment and market expansion strategies of Chinese automotive components
companies into Indonesia, with a case study on PT Luzhou Developing Indonesia Auto
Components. It looks into factors such as political, economic, social, technological,
environmental, and legal with the use of the PESTEL framework. The data were
obtained through literature reviews and direct observation at PT Luzhou. The findings
show different problems of Chinese automotive companies, including high production
costs, dependence on a small customer base, increasing pressure from established
Japanese automakers, and the transition of Indonesia toward electric vehicles.
Significant barriers also exist with regard to cultural difference, local content, and
environmental regulation. On the other hand, it shows adequate opportunities for
growth, driven by Indonesia's economic development and increasing demand in the
automotive sector. These findings underpin the need for realignment of strategies of
companies from China, creation of innovation, and adherence to local regulations. This
way, they will be able to take advantage of market opportunities and reduce operational
risks. Critical inputs from research would help PT Luzhou and similar firms plot a
course through Indonesia's regulatory and competitive landscape for the nurturing of
sustainable growth in the fast-changing automotive market.
