Business players see opportunity from AEC
Business groups have said that the upcoming economic integration, known as the Asean Economic Community, will create more opportunities than threats to local businesspeople, as they will gain greater access to a bigger market.
The Association of Indonesian Automotive Manufacturers (Gaikindo), Indonesian Retailers ssociation (Aprindo) and Indonesian Food and Beverage Association (Gapmmi) have come with one voice, positively welcoming the single market, which is set to open at the end of this year.
"For us, the single market is an opportunity for Indonesian carmakers as the market could expand," Gaikindo secretary-general Noegardjito said recently at a discussion held by Maybank in Jakarta.
According to Noegardjito, the country has huge potential, particularly in car exports to its Asean neighbours, as it supplies only around 222,000 units for the Southeast Asian region, where demand hits around 3.2 million units a year.
Indonesia’s car manufacturers produced 740,385 units during the January-August period of this year, of which 30 per cent was exported to Asean countries.
The country is now the second-largest car manufacturer in the region after Thailand, which produced over 1.8 million units last year.
According to data from Gaikindo, Indonesia’s auto production gradually increased from 1.07 million units in 2012 to 1.29 million last year, while Thai production declined from 2.4 million units in 2012 to 1.8 million units last year.
The AEC – which comprises Indonesia, Brunei, Cambodia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam – is set to provide freer movement of goods, people and services in the region. It will also form a giant bloc of 620 million people with a combined gross domestic product (GDP) of US$2.7 trillion.
Voicing a similar view, Aprindo chairman Roy Mandey said Indonesian retailers welcomed the upcoming single market as it would provide more market options.
He said, however, that the government needed to facilitate local businesspeople by providing guidance on the best places outside Indonesia to market products, among others.
Roy added that local retailers did not have to worry about the possible inflow of foreign retailers into the Indonesian market as long as local food and beverage product supplies met national demand.
Some retailers from neighbouring countries have started eyeing the Indonesian market, which accounts for 40 per cent of Southeast Asia’s market. Malaysian retail conglomerate Texchem Resources and Philippine fast-food icon Jollibee stated previously that they would enter the Indonesian market.
