Economy & Industry

Automotive Industry Ready to Compete in MEA



JAKARTA – The Government of Indonesia declares that automotive industry possesses abundant potentials to strengthen car export at the light of ASEAN Economic Community (MEA) that begins in effect in early 2016. The Trade Ministry’s Director General for International Trade Cooperation, Mr Bachrul Chairi, said that the enormous opportunity for Indonesia’s automotive industry is in line with populous ASEAN consumers that use private vehicles.

In addition, Indonesia’s automotive component industry also has bright prospect to attract foreign investments. This can be seen from the upcoming foreign companies that establish Indonesia-based manufacturers of automotive products for export. Some Japanese companies— Daihatsu, Honda, Mitsubishi, Suzuki, and Toyota— improved their investments in Indonesia in 2015 to support tier-3 of automotive component industry. So far, automotive component industries in Indonesia are mostly in tier 1 and tier 2, producing items such as car exteriors, chassis, disk brake, tyre.

In the long run, the Government is determined that the automotive component industry will significantly grow to become main products for export from Indonesia. Despite the growth of national automotive industry, Indonesia is still facing stiff competition in its effort to improve export to ASEAN countries. The strongest competitor is Thailand that has been becoming the basis of development of automotive technology in Southeast Asia. When it comes to car production, Thailand is still dominating. Meanwhile, Indonesia holds the first place for being the biggest car market in ASEAN.

However, Mr Bachrul went on, Thailand is no longer able to accommodate further growth that investors desire, which forces them to find alternative country. In that case, Indonesia can come up to seize the opportunity to expand its automotive industry.

Automotive human resource readiness

As to human resources, Secretary of the Director General of Training and Productivity Ministry of Labor Mr Kunjung Masehat acknowledges the readiness of Indonesia’s automotive industry in dealing with the ASEAN Economic Community. He sees this sector has a great number of skilled labours.

In the future, the Government and automotive producers will collaborate to improve labourers’ skill to face the ASEAN Economic Community. The industry will launch a programme to help labourers to upscale their skills in dealing with technical process of car manufacturing from the very beginning to the phase of car delivery. The Government will also introduce a standard of competency for labourers (SKKNI). (*)
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