Indonesia likely to become East Asia auto parts industry base

The inceasingly bright growth prospects of Indonesia`s automotive market are boosting the government`s belief that the country can eventually become a car parts industry base for East Asia, chief economic minister Hatta Rajasa said.

“If we consistently entertain the idea that Indonesia is an ideal place for automotive companies to base their car parts industries in, and continue to maintain our automotive market growth, it is not impossible that in the not too distant future our automotive industry will become the biggest not only in Southeast Asia but East Asia,” the coordinating minister for economic affairs said here on Friday.

He made the statement in his address opening the 19th Indonesia International Motor Show (IIMS) 2011.

But Indonesia could become a strong automotive parts industry base in the world and maintain its bargaining position as such only if it could forge a good connectivity between automotive and infrastructure industries, heighten efficiency at production levels and ensure the continuity of industrial feed stock supply lines, he said.

“Therefore, cooperation is needed between business and the government. This is good for the self-reliance and resilience of our automotive industry,” he said.

Hatta also said Indonesia should draw maximum benefit from its present position as the chair of the Association of Southeast Asian Nations (ASEAN) and as the coordinator of the integration of the automotive sectors of ASEAN member countries – an area being prioritized in the formation of an ASEAN Economic Community by 2015.

“This is a good momentum for Indonesia to accelerate its automotive industry development,” he said.

Meanwhile, Bambang Trisulo, chairman of the advisory council of the Association of Indonesian Automotive Industries (Gaikindo), said he was optimistic Indonesia could become a strong automotive parts industry base for East Asia.

“I believe for 80 percent that we can achieve it so long as we can carry out what Hatta has outlined,” Bambang told ANTARA.

He said Japan as the biggest automotive producer in Asia had become more aware of the risks of keeping its car parts industry in Japan following the recent earthquake and tsunami there and might relocate its production facilities to Indonesia.

Another country that was eyeing Indonesia as a possible base for its auto parts industry was South Korea, and so was China, according to Bambang

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