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NEWS UPDATES 18 June 2009

Indonesia sees FTA with Japan to boost autoparts shipments 

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Indonesia has a good chance to increase its automotive component exports to Japan, particularly after both countries have signed a free trade agreement, state news agency Antara quoted the industry ministry as saying.

"We have been exporting automotive components to Japan worth a total of $2.4 billion per annum. With the agreement, the chance to increase the exports is wide open," Director General for Transportation Means Industry and Telematics, Budi Darmadi said Wednesday in Jakarta.

Speaking to the press after addressing a seminar on automotive industry in Indonesia, the director general said that Indonesia also exported 900 units of completely built-up Grandmax Toyota cars last year.

A number of Japanese automotive firms had also set up car assembling plants in
Indonesia which used about 75 percent component parts made locally in Indonesia such as Avanza, Xenia, Terois, Rush, Inova, Forturner, Livina and APV cars.

He said that industries using local raw materials continued to develop, particularly those of motor vehicles such as Honda, and Yamaha which used 96 percent component parts.

"The motor vehicles are 96 percent made in Indonesia as only four percent of their component parts are made abroad. We deliberately do that because at present production is basically `global production` so that we can exchange components within Asean," he said.

The director general said that Indonesia had also exported transmission components to a number of countries in Asean, Central Asia and Latin America in the hope that Indonesia would become a global component production base.

But the problem was that the number of component industries in the country was still limited, reaching only about 600, while the deal number to meet the domestic and overseas need was about 1,000 firms.

He said that in 2008, about 600,000 units of four-wheeled motor vehicles were produced in Indonesia and 6.2 million two-wheeled motor vehicles. Of the total, 100,928 were car units and 300,066 were component parts.

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