Thursday, 10 December 2015


As one of the government’s appreciation to the automotive industry and component industry that have entrusted their investment, the government no only strives to create a conducive business climate, but also to conduct strict monitoring of imported products of interior quality. According to Minister of Industry, Saleh Husin, entrepreneurs, both engaged in automotive of component manufacturing, need not worry. Because it is the government’s commitment to protect them from the invasion of imported components that do not meet the standards.

In a discussion on automotive industry in Jakarta, Monday (August 10), Minister of Industry, Saleh Husin, pointed out that the surveillance conducted is not just for the sake of investment, but also to maintain the existence of workers in the motor vehicle industry as well as for consumer protection. This means that the double impact that occurred here are broad. “For that we keep the domestic after-market, which is very large, in order to be optimally utilized by the domestic component industry by tightening of supervision over the circulation of low-quality products from abroad,” he said.

The chance of the absorption of domestic motor vehicle and component products, according to Minister of Industry, can be optimized by meeting the demand for automotive products for the government and state enterprises. It becomes a stimulant to show domestic production in order to support national demand.

The Ministry of Industry recorded that domestic vehicle production has been exported to more than 80 countries. Total exports of completely built up (CBU) vehicles in 2010 was 85,796 units, whereas in 2014 at 202,273 units. Total exports from January to June 2015 reached 107,448 units. While, car production in the same period reached 577,507 units. Likewise, the rate production, if in 2009, total car production reached 464,816 units, in 2014 increased to 1,298,523 units.

In the future, car production in 2020 is estimated to reach 2.5 million units, with exports in 2020 in 2020 expected to reach more than 600 thousand units. While, production in 2025 is estimated to reach 4.1 million units. Minister of Industry, Saleh Husin, was also optimistic that the national automotive industry continued to improve. One effort to promote this is by holding Gaikindo Indonesia International Auto Show (GIIAS 2015) in August 20-30, 2015 in Indonesia Convention Exhibition (ICE), BSD City, South Tangerang. “The exhibition is an event for the global industry to see that the Indonesian domestic market is promising, as well as an opportunity to demonstrate the ability as an export-oriented automotive production base,” Saleh Husin added.

Export Orientation

Indonesia’s automotive industry is working hard to compete with Thailand in the production and export of four-wheeled vehicles and in strengthening the competitiveness of the national automotive industry, so as not to be eroded by imported products. Minister of Industry, Saleh Husin, revealed that these two things are to win the competition ahead of the implementation of ASEAN Economic Community by the end of 2015. “Indonesia has become the 2nd largest automotive manufacturer in ASEAN after Thailand. We should be able to overtake because our industry is able to fill the export markets besides our domestic market potential, which is also great, “said industry Minister Saleh Husin.

Currently, Thailand has been producing about 2.5 million vehicles a year where 50 percent is exported. Indonesia followed with a production capacity of 1.2 million units per year and still oriented to the domestic market. While, the potential of the domestic market. While, the potential of the domestic market is still supported by the middle class population. According to data from AC Nielsen in 2013, the growth rate of middle class population in ASEAN in 174%, the highest among all ASEAN in 2012-2020 was 110.5%, while in Indonesia reached 174%, the highest among all ASEAN countries. “This indicates that domestic demand for motor vehicles will increase. At the same time, it strengthens our optimism to change the paradigm into exporter and to become one of automotive product bases in ASEAN and the world, “he said.

Program of development of automotive industry, in the future, must be directed and carried out within the framework of: first, balancing of competition and import of vehicles, especially from ASEAN; second, encouraging investment; third, encouraging the independence of Indonesia in the field of automotive technology through mastery of technology and capacity building of human resources; and fourth, development and protection of domestic market as basis for developing an independent automotive industry, which is globally competitive.

In addition to providing a means of transportation of people and goods, the automotive industry also plays a role in providing employment. Based on data from the Ministry of Industry, labor absorption in this sector reached about 1.3 million people, which is absorbed in the assembly industry, component industry, and other related economic activities, such as workshops and after-sales network.

This is the basis so that the automotive industry serves as one of the priority industries in the national industrial policy. The automotive industry is also included in the group of leading industries of the future. Development of automotive industry in the future should be directed at improvement of competitiveness fundamentally and sustainable by utilizing all available automotive industry lies in the efforts to mobilize and organize all productive resources potentials in order to produce motor vehicles, which are innovative and competitive, in accordance with market demand.

On the same occasion, Director General of Metal, Machinery, Transportation Equipment and Electronics (ILMATE) of the Ministry of Industry, I Gusti Putu Suryawirawan, stated that the progress of the national automotive industry requires strong supporting industries, such as component industries. “The domestic component industry must be strong, supporting industries, such as component industries. “The domestic component industry must be strong, so there will not be a lot of imports”. It can encourage the automotive industry roadmap, which targets to achieve car production at around 2.5 million units by 2020.

Therefore, the Director of Small and Medium Enterprises (SME), Euis Saedah, added that the Ministry of Industry has facilitated small & medium component industry to enter the global value chain system, through increased mastery of advanced technology and improvement of quality management system implementation and facilitation for certification. “The challenges faced by SMEs in order to compete include improvement of quality and availability of raw materials in the country, competence of human resources, improvement of technology and standardization, and expansion of market access,” he explained. (E)

Business News - August 14, 2015

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