Car industry told to strive for efficiency<\/p>\n
JAKARTA (JP): Minister of Industry Tunky Ariwibowo has told
\nautomobile producers to improve efficiency, or face being edged
\nout under impending Southeast Asia free trade arrangements.<\/p>\n
\"Efficiency is a keyword for winning, both regional and global
\ncompetition. Thus, I call on the local automotive industry to
\nimprove efficiency, as we still have enough time to do so,\" Tunky
\ntold a seminar organized by the German alumni association in
\ncooperation with the Indonesian automotive industry association.<\/p>\n
He said that, even though they are not engaged in exporting,
\nlocal automobile producers will face tougher competition -- even
\non the domestic market -- from foreign car manufacturers,
\nespecially after the advent of the Association of Southeast Asian
\nNations Free Trade Area (AFTA) in the year 2003.<\/p>\n
By that year, under last May's deregulatory package, import
\ntariffs on sedans and station wagons of the types assembled
\ndomestically will be cut to 40 percent from the current level of
\n125 percent.<\/p>\n
The tariffs on pickups and minibuses will be reduced to 30
\npercent each by 2003, from the current levels of 50 percent and
\n75 percent respectively.<\/p>\n
Efficiency<\/p>\n
\"The year 2003 is something given, and we cannot avoid it. So,
\nin anticipating the implementation of AFTA, once again we have to
\nimprove our efficiency. That's the only way,\" Tunky said.<\/p>\n
In addition to foreign players, Tunky said that, as the
\ngovernment had removed the automotive sector from its negative
\ninvestment list, the existing automobile assemblers will face
\nnewcomers to the industry as their competitors.<\/p>\n
He said the government has given enough room to domestic
\nautomotive producers to improve their specialties, in either
\ntrading, manufacturing or assembling automobiles.<\/p>\n
\"So, it's not true that we haven't developed the automobile
\nmanufacturing industry. We let those involved in the industry
\ndecide themselves whether they want to do trading, assembling or
\nmanufacturing. We leave it completely to their business
\njudgment,\" Tunky said.<\/p>\n
Critics have said that Indonesia's automotive industry cannot
\nyet move into full manufacturing because it has been heavily
\nprotected. They argue that those who have enjoyed the
\ngovernment's protection have used their \"rent\" profits in other
\nsectors, rather than developing the automotive industry.<\/p>\n
Others have said that Indonesia lags behind in the automotive
\nindustry because too many automobile brands have been developed
\nin the country.<\/p>\n
Tunky, however, ruled out any limitation on the number of
\nautomobile brands, saying that such a limitation would be
\ninconsistent with the deregulatory policies currently being
\npursued by the government.<\/p>\n
\"The success of any industry, including the automotive
\nbusiness, will depend very much on the customers. Therefore, if
\nthe costumers do not like a certain product, maybe because of its
\nprices, the product will be automatically edged out,\" Tunky said.<\/p>\n
The minister also ruled out the possibility of limiting the
\nproduction of automobiles in Indonesia. \"Many of our people do
\nnot have cars. Once they are capable of buying them, let them buy
\nthem and enjoy driving their own cars. So, I won't limit either
\nthe number of car brands or of the cars themselves.\" (rid)<\/p>",
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