Parts industry must improve efficiency
Parts industry must improve efficiency
Sari P. Setiogi, The Jakarta Post, Jakarta
Indonesia's automotive parts industry needs to boost its
efficiency and productivity to be able to support the fast-
growing domestic car market and obtain wider access to the export
market, according to industry experts.
"Efficiency and productivity should be improved to gain more
access to the export market," said Djangkep Budhi Santoso, who is
in charge of product and technology development at auto component
maker PT Astra Otopart.
He added that the continuation of product development and
maintenance of good quality were equally important.
He was speaking at an industry forum earlier this week.
Development of the country's automotive components industry
has been lagging behind that in the car manufacturing industry, a
situation seen as one of the stumbling blocks to developing a
strong local car industry as in other neighboring countries.
According to data from the Association of Indonesian
Automotive Manufacturers (Gaikindo), the country's automotive
industry, which invests around US$7 billion per year, produces
some 750,000 four-wheeled vehicles, 3 million motorcycles, 6,000
buses and 20,000 minibuses annually.
However, in the components industry, there are only around 200
companies, including those engaged in making motorcycle
components. In comparison, Thailand has some 1,500 auto part
companies.
The government has also been pushing the components industry
to export more products amid the current trade liberalization
drive.
"The opportunity (for automotive component exports) out there
is very promising, including the coveted U.S. market," said
Director General of Metal, Machinery and Electronics Industries
Subagyo.
But of the 200 automotive part companies, fewer than 40
percent are ready for the export market, Subagyo said.
The market value of the country's auto components production
in 2002 reached $14.1 billion, of which only $629 million went to
the export market.
Director General of Small and Medium Enterprises at the
Ministry of Industry and Trade Aang Tjahajadi said that since
many of the local component makers were small-scale operations,
they had been unable invest in the latest technology and
strengthen their human resources capabilities.
"In the global market, component models change very rapidly.
For small businesses, it is somehow hard for them to keep
updated," said Aang.
He said consequently it was difficult for them to compete in
the international market.
Indonesian Component Industry Structure
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Two-wheeled engine 7 companies
Body parts
Axle, brake, clutch, transmission, 11 companies
steering, shock absorber
Pressed parts, glass, radiator, 182 companies
mufflers, electricals, rubber & plastic,
casting
Total 200 companies
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Source: Gaikindo