AAF looking to boost region's automotive supporting industries
AAF looking to boost region's automotive supporting industries
JAKARTA (JP): Automotive supporting industries in Southeast
Asian are shifting their market focus overseas to offset the
decline in car sales in regional domestic markets, the ASEAN
Automotive Federation (AAF) has said.
"The most important step now is to increase orders, so we must
prioritize the exports of the products of our supporting
industries," the organization's newly elected president, Herman
Latief, said here yesterday.
Herman, also the chairman of the Association of Indonesian
Automotive Industries, said producers of the car parts in the six
countries under AAF, most of which have been hit by the crisis,
could increase their supplies of car parts to their principle
companies in Japan.
AAF groups automotive industries in Indonesia, Malaysia,
Singapore, Brunei Darussalam, Vietnam and the Philippines.
Herman said Japanese car producers had pledged support of
their local partners in AAF which were suffering from drastic
downturns in sales of cars.
"AAF's task is to see that this commitment is realized into
concrete measures."
The Japanese-based principle companies, for example, must
provide both financial and market support for their ASEAN
partners so they could continue operations and avoid mass
layoffs, he said.
He said the local producers of car parts could supply directly
to the Japan's plants or through the first line suppliers of the
car makers in other countries.
Herman said the supporting automotive industry in Indonesia
had long been a problem.
Producers of car parts and components were mostly composed of
small or medium-scale companies with little capital, he said.
The companies lacked sophisticated technology and efficient
human resources, he said.
The producers also lacked a strong marketing network, he said,
adding these factors car producers in Indonesia to depend highly
on imported parts.
"But in a time of crisis like this, we cannot depend on just
selling cars, we must instead export the components."
Herman estimated sales in Indonesia would likely fall to
50,000 units this year, down from 395,000 last year. In the
first half of this year, sales reached about 33,000 cars, he
said.
Car sales are also estimated to fall significantly in
neighboring countries this year.
Thailand estimated its car sales would fall to 130,000 cars
this year from 300,000 in 1997, while Malaysia would likely drop
to 180,000 from 420,000, he said. (das)