Embracing AEC Challenges: The Technological and Capacity Development of Indonesian Automotive Industry

Hadi Sanjaya; Teuku Yuri M. Zagloel

Hadi Sanjaya Industrial Engineering Department, Faculty of Engineering, University of Indonesia
Teuku Yuri M. Zagloel Industrial Engineering Department, Faculty of Engineering, University of Indonesia

Keywords: Automotive Industry, ASEAN Economic Community, Standard Harmonization, Conformity Assessment

Abstract

This paper aims to track the progress and assess the gaps of Indonesia
automotive industry in ascension to ASEAN Economic Community (AEC) 2015. Given the
scale of challenges and the necessity to address technical barriers to trade, a stronger emphasis
was particularly given to evaluate the readiness of technological infrastructure and personnel
competency in Indonesia. The work in this paper departs from AEC blueprint issued in January
2008, which has since laid out the road map to integrate ASEAN economy. As the automotive
sector in Indonesia operates at an increasingly global environment and in order to meet
integration challenges, some priority actions as part of strategic approach for automotive sector
were identified, whereby Indonesia has taken various approach and measures to reach the
objectives. This paper presents structured survey and interview to industry practitioners,
legislators, as well as strategic analysis to government regulations which may affect the
industry. The study turns out to be crucial given that there was no similar work in the past which
assess the readiness of Indonesia’s automotive industry regarding ascension to AEC. To the
extent of this, the empirical result shows that government policies, technical infrastructures and
professional competencies are closely linked togetherto safeguard industry competitiveness,
produce goods that meet global quality standard and contribute to export success.