Abstract
This research examines the state of competitiveness of the Indonesian automotive Industry today; identify opportunities and challenges, facing the Indonesian automobile industry; address efforts made to develop the opportunities and address the challenges; and draw policy recommendations that are potent to address problems, obstacles, and challenges facing the automotive industry. The study primarily uses a qualitative research approach, and employs research methods including semi structured interviews, in depth interviews, literature review of government policies, reports, and statistics on automotive product production, sales volumes, contribution to the economy, exports and imports; research reports from the Agency for the Development and Application of Technology (BPPT); reports and statistics issued by the Association of Indonesia Automitive Industries (GAIKINDO), and the European Chamber of Commerce (Automotive Division). Findings show that Indonesian automotive industry and market posted strong growth of 10 percent during the 2007-2011 period. This is reflected in production and sales figures that have showed an upward trend in line with the general performance of the economy. The Indonesian automotive industry in some respects is ready for post 2015 ASEAN. This is discernible from a number of areas such as semi-skilled and skilled labor; a supportive regulatory framework that protects domestic automotive product manufacturers from unfair competition from ASEAN and non ASEAN manufacturers; improvement in government governance as reflected in rising transparency, some major inroads in corruption control, improvement in macroeconomic management which has created a low inflation, stable exchange rate, low national debt to GDP ratio, capital inflows, and the tax regime.
References
"Astra Reaps Rp.9.7 Trillion in Net Profits on Brisk Car Sales." The Jakarta Post. Friday, July 27, 2012.
Bank Indonesia. 2012. "General Bank Performance in Billion Rupiah," available at: http://www.bi.go.icilwebiid/Statistik/Statistik+Perbankan/Statistik+Perbankan+Indonesia/spi_0912.htm
"BI Ties Bank Services to Capital Level," The Jakarta Post, Saturday, November 24, 2012, available at: https://www.thejakartapost.com/news/2012/11/24/bi-ties-bank-services-capital-level.html
BIM, March 2, 2012. "Program Kerja Direktorat Jenderal Basis Manufaktur, delivered on March 2, 2012 in Work Meeting." Ministry of Industry, Jakarta.
BPS, 2012. "Trends of Socioeconomic Indicators of Indonesia, August 20127 Indonesia Statistics, BPS.
Burtless, G. February 7, 2012. "Labor Market Continues to Strengthen." Economic Studies, The Brookings Institution, available at: http://www.brookings.edu/opinions/2012/0203_jobs_burtless.aspx
Dewa Yuniardi, "EXCERT OF Kompas TV interview with National Secretary of N USA." September 25, 2012.
EUROCHAM, 2012. "Position Paper Automotive 2012. European Business Chamber of Commerce in Indonesia," available at: http://www.eurocham.oridijoomla/index.php?option=com_rokdownloads&view=file&Itemid=1278zid=306:automotive-position-paper
Gondoprajogo, J., Mei 1996. "Ulasan Tentang Kejaksanaan Industri Otomotif. Laporan Teknis," Badan Pengkajian dan Penerapan Teknologi.
Government of India, 2006. "Automotive Mission Plan 2006-2016: A Mission for Development of Indian Automotive Industry," Ministry of Heavy Industries and Public Enterprises, Government of India.
Groh, Alexander, Heinrich Liechtenstein and Karsten Lieser, 2012. "The Global Venture Capital and Private Equity Country Attractiveness Index," Annual 2012 IESE-VCPE Novara University Business School, Ernst and Young, and EMLYON.
Habibie B.J. August 10, 2012. "Reaktu alizasi Peran Ilmu Pengetahuan dan Teknologi dalam Automotive Mission Plan 2006-2016: A Mission for Development of Indian Automotive Industry," Ministry of Heavy Industries and Public Enterprises.
Ing, L. Y., and G. Varela. 2012, “Constraints on Productivity and Investment in Indonesia’s Manufacturing Sector: Survey-based Analysis of Business Constraints.” Policy Note 4, The World Bank Office Jakarta, Multi Donor Facilit, Swiss Confederation, Federal Department of Economic Affairs, Kingdom of Netherlands, USAID.
"Investors Favor RI Over Asian Rivals. "The Jakarta Post, Thursday, July 26, 2012.
Jain, S., and R.K.Grag, Undated. "Business Competitiveness: Strategies for Automobile Industry."
Kaufmann D., A. Kraay, and M. Mastruzzi 2010, “The Worldwide Governance Indocators: Methodology and Analytical Issues,” World Bank Institute, The World Bank.
Komite Ekonomi Nasional, 2012. "Prospek Ekonomi Indonesia 2012: Terus Tumbuh di Tengah Ketidakpastian," Kompas, July 04, 2012. "Cabo Tanah Ganggu Implementasi Pembangunan."
Kristiadi, J., 2008. Demokrasi clan Etika Bernegara, Seri Orasi Budaya. Impluse dan Kanisius Publishers.
Kurniawan, A., August 2, 2012. "ESEMKA Lulus Emisi." Kompas Online, available at: http://otomotif.kompas.com/read/2012/08/02/3438/Esemkalolos.Uji.Emisi
Martin, N. B., Farrell, D., Greenberg E., Henrich, J. Jinjo, N., JoIles, M., Remes, 1. 2005. "Increasing Global Competition and Labor Productivity: Lessons from the US Automotive Industry," Mckinsey Global Institute.
MP3EI, 2011. "Master Plan for the Acceleration and Expansion ofIndonesia Economic Development, 2011-2025, Republic In-donesia" available at: http://www.ekon.go.id/media/filemanager/2011/05/27/p/d/pdf_mp3ei.pdf
Ramelan, R., 1994. "Hubungan Industri dan Disain dalam Industri Otomotif."
Ramelan, R., 1992. "Berbagai Masalah Alih Teknologi Di Sektor Industri Otomotif.”
Sardy, M., and fetscherin, M. 2009. “A Double Diamond Comparison of the Automative Industry of China, India, and South Korea, “Rollins College Publications, Publications online.
Shimokawa, K., 2002. "Reorganization of the Global Automobile Industry and Structural Change of the Automobile Component Industry," Tokai Gakuen University.
Taylor III, Al, July 2, 2012. "Auto Winners and Losers in 2022." Fortune Magazine, available at: http://money.cnn.com/galleries/2012/autos/1206/gallery.auto-predictions.fortune/5.html
The World Bank, IFC, Doing Business 2012. "Doing Business in a More Transparent World, 2012," The World Bank.
Thomson, M. December 17, 2012. "India's Economy Grows At Slowest Rate In Decade." CNN Money, available at: http://money.cnn.com/2012/12/17/news/economy/india-economy/index.html?cnn=yes&hpt=hp_t3
Tri Widodo, 2010. "Potret Industri Manufaktur Indonesia Sebelum dan Pasca Krisis. (Suatu pendekatan fungsi produksi Cobb-Douglas)," Ministry of Finance, available at: http://webfiskal.fiskal.depkeu.go.id/2010/adoku/Tri%20wibowo_Potret%20Industri%20Manufaktur.pdf
Veloso, F., and R., Kumar, 2002. "The Automotive Supply Chain: Global Trends and Asian Perspectives," ERD Working Paper Series No. 3, Economics and Research Department, Asian Development Bank.
VOA, Indonesia. Thursday, December 30, 2010. "Masterplan Ekonomi Indonesia akan Fokus Pada Industri Manufaktur," available at: http://www.voanews.com/indonesian/news/Masterplan-Ekonomi-Indonesia-akan-Fokus-Pada-Indus-tri-Manufaktur-112682049.html
World Economic Outlook Indicators. IMF/World Bank.
Yates, C. A.B., and Vrankulj, S., 2006. "Labor as a Competitive Advantage in the Canadian Automotive Parts Industry: A study of Canada and Four Local Labor Markets" (Brantford, Stratford, Guelph, Windsor) Labor Studies Program, McMaster University.
Yi, Ilcheong, 2012. "Economic and Social Development in the Republic of Korea: Processes, Institutions and Actors." Research and Policy Brief No. 14, October 2012, United Nations Research Institute for Social Development (UNRISD), available at: http://www.unrisd.org/80256B3C005BCCF9/http-NetlTFramePDF?ReadForm&parentunid=ED069C32DOFCE1AEC1257A8C002C410E&parentdoctype=brief&netitpath=80256B3C005BCCF9/%28httpAuxPages%29/ED069C32DOFCE1AEC1257A8C002C410E/$file/Research%20Brief_KOICA_1%20 %28for%20printer%29-revpdf
Yulisman,. "ASEAN Services to Flood RI." The Jakarta Post. Thursday, December 13, 2012.