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The 2013 edition of the Indonesian International Motor Show – which opened yesterday in Jakarta – has seen plenty of activity from Japanese automakers, who are using the show to showcase small, fuel-efficient vehicles meant to further consolidate their market dominance, the Nikkei reports.

The introduction of the Low-Cost and Green Car (LCGC) programme by the Indonesian government has certainly spurred activity – the tax breaks the programme introduces means that small, fuel-efficient cars will become more accessible price-wise to the low- and middle-income group. In order to qualify for the tax breaks, a car must not only be inexpensive and fuel-efficient, but also contain 80% locally-sourced parts.

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Suzuki introduced its 1.0 litre Karimun Wagon R at the show, and the report suggests that the model could enter the Indonesian market as early as October. The automaker also officially announced its plans to build a 93 billion yen factory, which will be located near Jakarta.

The plant, scheduled to begin operations in February next year, is set to boost local production capacity by about 70%, to 250,000 cars annually. According to executive vice president Toshihiro Suzuki, future plans to utilise Indonesia as an export base are under consideration.

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Honda, meanwhile, had its Brio Satya on display. The car, officially introduced last week and due out in the market in November, also qualifies for tax breaks under the LCGC programme.

The company also stated its intent to enter the small MPV market, with the world debut of the Mobilio prototype signaling that. Honda president Takanobu Ito stated that the company is aiming to quickly capture a 10% market share, which likely means that the Mobilio will be fast-tracked for production.

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Elsewhere, Daihatsu and Toyota started sales of the Ayla and Agya eco-car twins earlier in the month, ahead of the IIMS – both also qualify for LCGC certification (the first two vehicles to be certified, apparently), as will the Datsun GO and GO+ MPV, which are expected to enter the market next year.

Of course, there’s the flipside to things – according to Hafriz, who is reporting from Jakarta, while all the talk at IIMS is all about the LCGC programme and the vehicles that it’s spawning, there are those who say that it’ll make the already bad traffic jams worse. If one percent of the millions of the motorbike-riding crowd trades up, he ventures, it’ll be pretty much gridlock 12 hours a day. Certainly food for thought.