II - Decision-Making Process In Indonesia On The Asean Automotive Complementation Project

Summary

Indonesia has a strong commitment to the automotive industry complementation as indicated by the activities of the Association of Automobile Sole Agents and Assemblers (GAAKINDO). The latter convened the ASEAN Automotive Federation (AAF) in 1976. GAAKINDO was subsequently renamed the Automotive Federation of Indonesia or Federasi Otomotif. Members of this federation have explored other problems to upgrade the viability of ASEAN automotive industries, such as through “software complementation” and “strategic planning”. The Indonesian Government has also assisted the private sector in promoting co-operation in the automotive industry in ASEAN and to identify the problems that have emerged and their possible solutions. Although i t is recognized that each country would like to produce its own vehicle, Indonesia has agreed to make use of the components now available in the ASEAN countries instead of importing from the principals in other countries. While Indonesian's aim is to have a national vehicle by 1987 it will still export parts for the complementation and purchase parts from ASEAN members for the other vehicles that are produced in the country.

This section tries to show how decisions have been made in Indonesia for the automotive industry complementation in ASEAN and how its industry has been affected by the decisions.

In Indonesia, the government and the private automotive associations have been the two sectors which make decisons for the automotive complementation. From the start of the complementation project, the government has been the leading sector because of its pervasive role in the Indonesian economy. The government has laid out general policies for the various economic sectors to follow, and in particular, as far as the automotive industry is concerned, the official policy is to start producing the automotive engine in 1983 and to finally produce all the parts for the whole vehicle by 1987. However, it is the automotive parts producers who must attend to the problem of how to phase their business to fit in with the objectives of the government.