Indonesia Becomes Automotive Production Basis

Reuters

Vehicles and motorcycles are seen during rush hour in Indonesias capital of Jakarta June 7, 2010. Indonesia car sales increase up to 77 percent in May 2010 at 299,000 units compare to a year earlier, in a sign of growing domestic demands as cars and motorcycles become much more affordable due to central banks interest rate remains at record low while inflation rate still maintained under four percent.

JAKARTA, KOMPAS.com - Industry Minister MS Hidayat believed that Indonesia would achieve its target of building a firm and strong automotive production basis by 2025.

"The automotive producers’ enthusiasm in Indonesia is quite high. They themselves have told me that they will consider Indonesia as their production basis, therefore I believe that in 2025 we will see that the production basis may come true," MS Hidayat said in Jakarta Monday.

He also pointed out that Indonesia’s geographical position of easy reach of other countries in the world has become a consideration in itself for the world’s automotive principals. Production cost efficiency up to distribution have become the main consideration for each automotive producer so that the location of their factory has also become their attention.

Quantatively, the government planned to develop Indonesia onto a production basis of multi purpose vehicles (MPV), sport utility vehicles (SUV), small economical sedans, commercial trucks higher than 24 tons, medium size sedans, hybrid cars, and premium cars by 2025.

The government also have a target that 80 percent of the design of 4W gasoline engines for medium size sedans, produce quality components for premium cars, and develop suppliers of premium car components. Hidayat also said that in terms of availability of human resources, to support the development of Indonesia as an automotive production basis is no secret because the automotive industrialists have recognized the talents of Indonesian human resources.