News Room - Business/Economics

Posted on 09 Jul 2009

Auto sector gets govt support (Indonesia)

To help create a linkage among automotive stakeholders, the government is developing a get-together forum in East Java for them, after establishing a similar one in West Java and Central Java, aiming to help better develop the industry.

 

"We're about to start it in East Java," Industry Ministry director for land and military transportation industries, Panggah Susanto, said at his office on Tuesday.

 

Panggah terms such a forum as an automotive cluster. However, he explained, this cluster did not refer to a location where auto-related manufacturers are situated nearby in one zone, but more of a forum where stakeholders gather in working groups to discuss what they need from each other to develop the industry.

 

He said the stakeholders included auto makers, auto part makers, assemblers, universities, research centers such as the Agency for Assessment and Application of Technology (BPPT), test laboratories, the government and banks.

 

"If they never met, they would never understand what the others needed. Our target is to strengthen the structure of the industry in various ways with outputs *assisting* productivity and efficiency."

 

Industry Minister Fahmi Idris earlier said this cluster development program initiated in 2005 and commenced implementation the year after, starting with problem diagnosis.

 

A working group in West Java was launched in 2007 and called "SMART Otomotif Jawa Barat", he said.

 

That working group has so far arranged a number of programs designed to develop the auto market and improve design capacity and skills in designing and standardizing auto parts, he said.

 

But Indonesian Automotive Industry Association (Gaikindo) deputy chairman and PT Toyota Astra Motor president director Johnny Darmawan admitted that auto makers have never taken part in such forums.

 

"I've never known of such a cluster development program, nor how it works. But I'd welcome any government programs that are meant to develop the automotive industry," he said in an interview, while adding that he would check the program with the regulators.

 

Toyota Astra Motor marketing director Joko Trisanyoto also refused to comment on this because, he said, he was not aware of such a program.

 

Car sales, which have dropped from a peak at 60,830 units in July last year, slightly increased from 34,604 in April this year to 35,818 in May, according to Gaikindo data.

 

However, cumulatively, car sales dropped 28 percent from 237,963 in the January-May period 2008 to 170,679 units in the corresponding period this year, the data shows.