I - Introduction

Summary

The idea of regional automotive complementation was first proposed by the United Nations Team Report on ASEAN in 1969. Subsequently, a meeting of the private automotive sector was convened in Bangkok on 29–30 October 1971 to programme the development of the ASEAN automotive industry. Representatives of the private automotive sector agreed at that meeting that the developing countries of Southeast Asia needed to industrialize more rapidly and therefore it would be useful to change the small home markets in each of the countries into larger ones to allow reasonable economies of scale, but for capital-intensive industries this need not foreclose the possibility of each participating country establishing its own national integrated automotive industry. To prevent uneconomic fragmentation of manufacturing activities once a larger market was established, manufacturers and assembly plants using imported, completely knocked down (CKD) packs would be limited to a smaller number as participants in the programme. The delegates also agreed that ASEAN governments should provide the necessary institutional framework, such as local content concept and tariff and non-tariff preferences, to support the project.

Inspired by the prospects of co-operation, GAAKINDO (Association of Assemblers and Sole Agents in Indonesia), convened the private automotive business at Jakarta on 23–25 June 1976 to formally organize the ASEAN Automotive Federation (AAF). The goals of the AAF are (1) to arrive at an orderly regional system for parts manfacturing and distribution, and (2) to develop and promote component manufacturing capability in ASEAN countries.

The AAF proposed to ASEAN COIME (Committee on Industry, Minerals and Energy) that an ASEAN Automotive Industry Development Plan be set up by an independent body of technical consultants with the following terms of reference:

1. Development Objectives

a. To develop the automotive industries in the ASEAN region on a viable basis to meet the requirements of the region and to tap potential export markets for automotive parts and components.

b. To induce the development of auxiliary industries which will accelerate the overall industrial development of ASEAN countries.