Auto industry told to upgrade

Auto industry told to upgrade

The Jakarta Post, Jakarta

Over the past five years the local automotive industry has grown
fast, and this is expected to prompt industry players to start
focusing on their ability to fully design and engineer
motorcycles by 2009, as well as increase the use of local content
in cars.

A senior Ministry of Industry official Agus Tjahajana said on
Monday that assemblers and their supporting industries, which are
mostly small and medium enterprises, must work together to build
up their competencies in automotive engineering and technology.

"As for the government, we will encourage industry players to
boost their research and development divisions and provide
incentives for them," he said on the sidelines of a seminar on
the development of automotive components industry in Indonesia.

"When investors ask the government about what kind of
incentive we can give them, the answer is actually the country's
big market. Security, among other things, is the real problem for
investors," he added.

PT Astra Otoparts Tbk president director Budi S. Pranoto said
that the component industry should focus on engineering and
technology.

"If we only rely on manpower, we won't be competitive enough
compared to other countries such as China and Vietnam," he said.
"Therefore, we must involve academicians and the government in
developing the technology."

Astra Otoparts held the seminar to coincide with a two-day
exhibition of its 28 subsidiaries on their progress in the
component industry.

A total of 483,000 cars and nearly 4.1 million motorcycles
were sold last year. This year the automotive industry expects to
sell 520,000 cars and five million motorcycles.

The targets may even be surpassed, considering that for the
car market alone the Association of Indonesian Automotive
Manufacturers (Gaikindo) has recorded sales of 143,986 units.

"The fact that Indonesia is the third biggest market for
motorcycles after China and India shows that we can penetrate
Asian markets with self-made components," Budi said.

He added that the government should set up national standards
for component industry.

"By having standards, we will eventually improve the quality
of our components."