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The European business chambers together with Indonesian industry associations organized a workshop discussing the possible harmonization of Indonesian and international automotive standards. The one-day workshop, held on 17th September 2013 as part of the EU-Indonesia Business Dialogue, was attended by member companies of EuroCham, the German Chamber of Industry and Commerce (EKONID) and officials from both Indonesia and the EU.
The ASEAN automotive market has experienced significant growth, with regional vehicle and motorcycle sales almost doubling to 3.5 million units in 2011 from 1.8 million units in 2006. Indonesia’s share of these sales was 1.11 million units. Increasing harmonization between ASEAN Member States’ regulations and standards will facilitate exports from the region, as foreign entities would only need to familiarize themselves with a single streamlined set of standards as opposed to different ones for every ASEAN country.
During the workshop, Head of the Economic and Trade Section of the EU Delegation in Singapore, Raffaele Quarto, explained that there would be considerable benefits for Indonesia should they decide to join the initiative to unify automotive regulations and standards, such as cost reduction, trade enhancement, increased power of influence, and flexibility. According to Raffaele, Indonesia would not only tap into automotive opportunities in ASEAN, but could also qualify for stronger cooperation with European businesses.
Responding to the input from the EU, the Indonesian Deputy Minister for Commerce and Entrepreneurship, Edy Putra Irawady stated that the ‘Standar National Indonesia’ (Indonesian National Standards—SNI) was well equipped to cover safety issues in the domestic automotive industry. On the other hand, he admitted that Indonesia’s car industry needed to work on its competitiveness, improve its technologies, focus on local sources, strengthen business associations, educate consumer behaviour, and attract sufficiently qualified labour. Mr. Irawady concluded his statement with the assertion that the Indonesian car industry does not necessarily have to adopt any standards other than those already stipulated in the SNI but also said that there is sufficient flexibility for the industry to adapt to other standards, especially if doing so would foster exports.
Global standards in the automotive industry were based on the United Nations Economic Commission for Europe (UNECE) Agreement of 1958 in which there are 2 major points. First, the Agreement provided procedures to establish uniform prescriptions about new motor vehicles and motor vehicle equipment and for the reciprocal acceptance of approvals issued under this UN Regulation. Second, when acceding to the Agreement, a contracting party is not obliged to apply all the UN Regulations annexed to the Agreement. The objective of the UN/ECE 1958 Agreement is to increase vehicle and road safety, lessen environmental impact by improving vehicle performance and facilitate global vehicle parts trade through uniform prescriptions for vehicles and their parts and reciprocal recognition of approvals granted.
KADIN Indonesia - 2013
Capital: Jakarta
Population: 259 million (2016)
Currency: Indonesian Rupiah
Nominal GDP: $936 billion USD (IMF, 2016)
GDP Per Capita: $3,620 USD at Current Prices (IMF, 2016)
GDP Growth: 5.0% (2016)
External Debt: 36.80% of GDP (BI, Q2 2016)
Ease of Doing Business: 91/190 (WB, 2017)
Corruption Index: 90/176 (TI, 2016)
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