Japan automakers promise to aid its local partners<\/p>\n
JAKARTA (JP): Japanese giant automakers grouped in the Japan
\nAutomobile Manufacturers Association (JAMA) promised on Thursday
\nto help their Indonesian partners in gearing up to face the
\nstiffer competition expected to result from the full
\nimplementation of the ASEAN Free Trade Area (AFTA) agreement in
\n2003.<\/p>\n
They said Indonesian vehicle assemblers would survive the
\ncompetition if they were able to upgrade the competitive
\nadvantages of their products and improve business efficiency.<\/p>\n
Fumio Yoshimi, general manager of Mitsubishi Motors
\nCorporation's international vehicle operations in Southeast Asia,
\nsaid the company would help strengthen the local production of
\nauto components to enable its Indonesian partner face the
\ncompetition.<\/p>\n
\"We'll continue production and use more local materials. And
\nwe also have to encourage the export of components to other ASEAN
\ncountries. That's our strategy,\" he told a media gathering.<\/p>\n
Almost all of Japan's major automotive companies such as
\nToyota, Mitsubishi, Honda, Suzuki, Nissan and Daihatsu have
\nestablished assembly plants in cooperation with local partners.<\/p>\n
Takashi Hibi, marketing manager of Toyota Motor Corporation's
\nlocal partner PT Toyota-Astra Motor, said the company was also
\nplanning to boost the export of vehicles and parts from Indonesia
\nto other ASEAN countries.<\/p>\n
He said Toyota-Astra had so far exported its domestically-
\nmanufactured multipurpose van, the Kijang, in complete knock-down
\nunits to Vietnam, Malaysia, Taiwan and the Philippines.<\/p>\n
\"There may be a great opportunity to market our Kijang in
\nThailand,\" he said.<\/p>\n
In order to maintain their business operations in each ASEAN
\ncountry during the free trade era, Japanese car makers will
\nlikely encourage their partners in each country to strengthen
\nproduct specialization, he said.<\/p>\n
\"There'll be a sort of job distribution among production sites
\nin the region,\" Hibi said.<\/p>\n
He said that Toyota, for example, had been implementing an
\nindustrial complementing network in its production sites in
\nThailand, the Philippines, Malaysia and Indonesia.<\/p>\n
Under the scheme, each country specializes in producing vital
\nparts thereby reaping benefits of scale, he said.<\/p>\n
Indonesia now specializes in the production of the Kijang as
\nwell as vital components like gasoline engines, clutches, door
\nlocks and radiators, while Thailand focuses on the production of
\nthe Hilux and Soluna models in addition to components like diesel
\nengines, stabilizers and exhaust pipes.<\/p>\n
Hibi predicted that after the implementation of AFTA, Toyota's
\npartners in Indonesia would likely face strong competition from
\nThailand, which was expected to export its locally-manufactured
\nToyota models here.<\/p>\n
AFTA is a pact among the 10 member countries of the
\nAssociation of South East Asian Nations (ASEAN), which groups
\nBrunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the
\nPhilippines, Singapore, Thailand and Vietnam.<\/p>\n
Under AFTA, ASEAN countries will see a free flow of automotive
\nproducts since the tariffs on automotive products will be cut to
\na maximum 20 percent by the year 2000, and will be cut further to
\nbetween zero and five percent by 2003.<\/p>\n
ASEAN members, however, must use at least 40 percent local or
\nregional content in the manufacturing of their automotive
\nproducts for sale within the region.<\/p>\n
JAMA's members include giant automakers like Toyota Motor
\nCorporation, Mitsubishi Motors Corporation, Honda Motor Co.,
\nLtd., Nissan, Daihatsu, Suzuki and Mazda.<\/p>\n
Last year, all the Japanese car makers in Indonesia produced a
\ncumulative 81,000 units at ten production facilities in
\nIndonesia, up from about 44,000 units in 1998.<\/p>\n
The figures were much higher in the pre-crisis period with
\n350,000 units being produced in 1997 and 301,000 units in 1996.<\/p>\n
The JAMA delegation is in town to attend the Third ASEAN Auto-
\nSupporting Industries Conference held in Jakarta on July 19 and
\nJuly 20. (cst)<\/p>",
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