Minister of Industry: The Use of Local Components Raise Indonesian Automotive Industry Competitiveness

By : Hariyanto And Aldi Firhand. A | Thursday, August 10 2017 - 22:21 IWST

Minister of Industry Airlangga Hartarto (second right) was accompanied by Director General of Metal, Machinery, Transportation and Electronic Equipment (ILMATE) I Gusti Putu Suryawirawan (left) at the opening of Gaikindo Indonesia International Auto
Minister of Industry Airlangga Hartarto (second right) was accompanied by Director General of Metal, Machinery, Transportation and Electronic Equipment (ILMATE) I Gusti Putu Suryawirawan (left) at the opening of Gaikindo Indonesia International Auto

INDUSTRY.co.id - Jakarta - The largest automotive exhibition Gaikindo Indonesia International Auto Show (GIIAS) 2017 has been officially opened by Minister of Industry, Airlangga Hartarto today at ICE BSD City, Tangerang, Banten.

He hopes, GIIAS becomes the Show off arena for automotive manufacturers in the country on the quality of vehicles produced, including in the increasing use of local components. "Increasing local content can boost the competitiveness of automotive industry in Indonesia," said Minister Airlangga at the opening of Gaikindo Indonesia International Auto Show (GIIAS) 2017, Thursday (8/10/2017).

Therefore, according to Airlangga, the new regulation that will soon be enacted also aims to encourage increased investment of motor vehicle assembly up to the manufacture of components in the country. "At this time there are 36 companies engaged in the automotive sector in Indonesia. Added value to local content is expected to increase, "he said.

In addition, there are about 1,500 component companies in the first tier to third which indicates the still opening of export opportunities. "We are also working on policies to increase exports by uniform incentives for sedan cars abroad," he said.

As is known, the automotive market share in Indonesia is the largest in ASEAN with a contribution of one third of the total ASEAN market demand or worth USD 1 trillion of total USD 2.3 trillion. This potential should be the basis for the development of the automotive industry. Not only at the assembly industry level, but also the component industry and raw materials industry so that autonomous national autonomy can be achieved.

"With the potential that we have today, surely the opportunity to export our flagship automotive products is very wide open, and the government certainly strongly supports business actors to not only play in the domestic market but also increase and expand the international market share," he explained.

Airlangga added, in the automotive sector there is the addition of 5,000 workers so that the total workforce reaches one million people. "If combined with supporting industries can reach five million workers. Thus, the automotive industry has added value that also absorbs a lot of manpower, "he explained.

Director General of Metal, Machinery, Transportation and Electronic Industry (ILMATE) I Gusti Putu Suryawirawan said that the increasing demand for transportation facilities, especially motor vehicles has a role in spurring the growth of the automotive industry in Indonesia.

"The development of the automotive industry has a broad multiplier effect, in addition to creating economic activity in the assembly and component manufacturing activities, as well as generating economic activities in the distribution sector to the after-sales service activities," he explained.

Therefore, according to Putu, the government continues to encourage the automotive industry sector to become the main pillar of national economic growth through strategic programs. This step aims, among others, to offset the competition and import of vehicles, especially from ASEAN, and encourage investment.

"In addition, it encourages Indonesia's autonomy in the field of automotive technology through the mastery of technology and human resource capacity improvement, as well as the development and security of the domestic market as a basis to develop automotive industries that are self-reliant and globally competitive," he said.

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