ASEAN KEY DESTINATIONS
Government urged to support electric car industry
Indonesia:The government is committed to developing the local electric car industry following growing trends toward creating green, low-cost vehicles, with the Industry Ministry preparing a set of regulations on the issue.
The upcoming regulation will comprise a strategic plan, including the possibility of using the local brand to support the local electric car industry.
Recently, Industry Minister Saleh Husin met representatives of the electric auto companies, including the East Java-based PT Green, a subsidiary of PT Bukit Jaya Abadi — the producer of large steel structures.
“The company requests the usage of local brands for locally made electric cars with certain engine capacity to accommodate domestic producers,” I Gusti Putu Suryawirawan, Industry Ministry’s director general of metal, machinery, transportation equipment and electronic industries, said.
Putu said the company’s request was based on the view that local electrical car manufacturers should be protected and offered incentives at the same time as locally made electric vehicles were made for limited purposes and markets in the country, such as in plantations and villages.
As local electric cars have yet to have widespread commercial use, Putu said the ministry would arrange a possible roadmap to enhance the capacity of local producers, while also being open to foreign investors.
“There will be a gradual requirement for the use of a certain percentage of local brands and local content for certain types of electrical car engines,” Putu said.
“The company requests the usage of local brands for locally made electric cars with certain engine capacity to accommodate domestic producers.”
According to Putu, the request for local brand requirements resembles China’s policy for its electric car industry, in which global electric car producers, such as Tesla Motors, are required to put local names beside their own global brands to protect that country’s manufacturers.
“The basic reason is to protect local brands in competition with global ones, but we would rather see it as an incentive rather than a form of protection, because we should avoid making regulations that close off global access to the local market,” Putu said.
Putu added that the requirement would be included in the ministry’s national car (mobnas) program, particularly in the category of low-carbon emission vehicles (LCEV), which are already mentioned in one of the ministerial regulations (PerMen).
Putu added that the ministry asked around six to seven local electric car producers to start forming an association. Given their small size compared to the manufacturers of gasoline-fueled and diesel-powered vehicles, he said electrical car producers had declined the suggestion to join the Association of Indonesian Automotive Manufacturers (Gaikindo).
Widiono, one of the top executives at Green, said local electrical car producers demanded a political will from the Joko “Jokowi” Widodo administration as previous governments had many times been stagnant in developing the industry.
“As producers, we are investing and we want to know how far the government will protect us as currently the Industry Ministry already has a program to develop low-carbon emission cars,” Widiono said.
Green, which markets its products to state-owned and region-owned enterprises, has an assembly plant in Surabaya that can produce at least 100 electrical cars annually, with engine capacity of around 1,000-1,500 cc and price of Rp 80 million (US$5,900).
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