Auto industry upbeat about 2002 AFTA agreement<\/p>\n
Adianto P. Simamora, The Jakarta Post, Jakarta<\/p>\n
The country's automotive components' manufacturers expressed
\noptimism that they would be able to survive regional competition
\nwhen trade liberalization is implemented in 2002 under the ASEAN
\nFree Trade Area (AFTA) agreement.<\/p>\n
Chairman of the Indonesian Automotive Parts and Components
\nManufacturers Association (GIAMM) A. Safiun said that the local
\nautomotive sector should benefit from the relatively low labor
\ncosts.<\/p>\n
\"We don't need to worry too much about the implementation of
\nAFTA,\" Safiun told The Jakarta Post.<\/p>\n
Under AFTA, the six founding members of the Association of
\nSoutheast Asian Nations (ASEAN) -- Indonesia, Singapore,
\nMalaysia, Thailand, the Philippines and Brunei Darussalam -- will
\nreduce import duty on automotive parts and supporting component
\nproducts to between zero and five percent.<\/p>\n
But Malaysia has asked for a delay until 2005 to protect its
\nnational carmaker Perusahaan Nasional Bhd., or Proton.<\/p>\n
The new ASEAN member countries of Vietnam, Laos, Cambodia and
\nMyanmar, meanwhile, are allowed to delay opening up their markets
\nuntil between 2006 and 2010.<\/p>\n
Safiun, however, admitted that the automotive industry could
\nnot rely on the low labor cost advantage in the long term,
\nstressing the importance of improvement in human resources to
\nhelp boost efficiency.<\/p>\n
Safiun noted the main concern of many local automotive parts
\nand component manufacturers in facing AFTA was how to eliminate
\nthe high illegal levies.<\/p>\n
\"Manufacturers of automotive parts and components have been
\nburdened by illegal levies which account for about 30 percent of
\ntheir production costs,\" he said.<\/p>\n
The association groups 120 companies producing automotive
\nparts and components, which employ thousands of workers.<\/p>\n
Bambang Trisulo, chairman of the Association of Indonesia
\nAutomotive Manufacturers (Gaikindo) also said that local car
\nassemblers should be ready to compete in the AFTA era as they had
\nlong been making preparations.<\/p>\n
But Bambang said manufacturers of automotive parts and
\ncomponents must improve efficiency and productivity as well as
\nproduct quality to survive the tighter competition.<\/p>\n
Meanwhile, Nanang M. Kafhidin, director of automotive
\ncomponent maker PT Hamoru Fitrahniaga expressed concern over the
\nrelatively low technology.<\/p>\n
\"Companies producing automotive parts and components are not
\nyet ready to compete in AFTA due to the lack of technological
\ndevelopment,\" he said.<\/p>\n
Nanang also said in anticipating the market liberalization,
\nthe local companies should have a clear business focus.<\/p>\n
\"Business focus is important to strengthen our position to
\ncompete with overseas products and to anticipate the influx of
\nlower-priced products from China,\" he said.<\/p>\n
Ridwan Gunawan, chairman of the Indonesian Motorcycle
\nManufacturers Association (AISI) said that the domestic
\nmotorcycle industry was basically ready to compete with ASEAN-
\nmade products as it had been bartering with its peers in the
\nregion.<\/p>\n
AISI groups local assemblers and distributors of Japanese
\nmotorcycles including Honda, Yamaha, Suzuki and Kawasaki as well
\nas Italy's Piaggio Vespa.<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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