Australian car companies seek RI business

Australian car companies seek RI business

By Russell Williamson

Indonesian vehicle manufacturers and component suppliers have
a substantial list of Australian automotive companies wanting to
supply products or develop joint venture operations as the local
car industry primes itself for expansion.

According to the Australian Government's foreign trade
department, Austrade, there are already 40 Australian automotive
component manufacturers supplying the Indonesian industry and
plenty more on the waiting list.

The automotive industry business manager for Austrade, Lynn
Brown, said there were a further 75 companies hoping to do
business because they viewed Indonesia's developing economy as
offering great potential for their products and services.

"Indonesia's recent announcement that new players are entering
their industry confirms this view that our near northern
neighbor holds strong prospects for development as a major market
for our products," Brown said.

"Even recognizing Indonesia's requirement for 60 percent local
content in motor vehicles, there is still excellent potential for
the Australian industry," he said.

Brown expects that once the Indonesian auto industry's
development plans come to fruition, in about 2000, the local
industry will be sourcing components from Australia worth more
than US$150 million a year.

At the moment, most Australian components imported into
Indonesia are sold as replacement parts or vehicle accessories.
However, Brown said, the growing relationship between the two
countries could see this trade develop much further.

"The level of contact over the past two years, and the
increasing level of direct commercial relations, is creating a
strong feeling of camaraderie between our two industries," Brown
said.

"Future export activity from Australia will be increasingly
devoted to sales of original equipment supplied through
Australian joint venture companies. These components will be used
for incorporation into motor vehicle assemblies with substantial
Indonesian content," he said.

Brown said a number of trade missions between the two
countries in recent years had raised the profile of the
Australian industry in Indonesia and demonstrated its potential
to supply local manufacturers.

Last year, a group of key Indonesian government officials and
motor vehicle industry members visited Australia to attend a
showcase of Australian automotive technology.

This was followed by a return visit by an Australian industry
mission, which began a process of serious joint venture
negotiations between a number of companies from both sides.

This process will be further enhanced during Indonesia's
major motor show, AE '96, to be held in December this year.
Nearly 20 Australian companies have already inquired about
participating in the show.

As a result of this increased contact between the two
countries motor industries, Brown said Indonesia was increasingly
looking to Australia as a prime source of manufacturing and
product technology, including tooling development and product
research and development.

A number of Australian companies are already believed to be
involved with the Maleo car project. The Maleo is the brainchild
of Minister of Research and Technology B.J. Habibie and is
expected to go into production about 1998 or 1999.

Brown said the growing trade relationship was not a one-way
street and there were also opportunities developing for
Indonesian companies to export to Australia.

"It is not just about Australia promoting and selling its
products and services to Indonesia," Brown said.

"We are now part of a process that will lead to increased
exports from Indonesia to Australia and which is bound to lead to
eventual joint venture participation between companies from both
countries looking for opportunities elsewhere in the Southeast
Asian region," he said.