Thursday, 27 June 2019 | 14:58 WIB

Toyota Optimistic about Maintaining Export Performance in 2019

Toyota Innova ready for export

JAKARTA, NNC - The positive record of Indonesian automotive exports last year provided optimism for Toyota in maintaining export performance in 2019. The expansion of exports of several Toyota-branded CBU models conducted last year kept Toyota focused on maintaining the stability of export performance, including product quality, timeliness of delivery in new destination countries.

"We project that the export performance of Toyota-branded CBUs will rise by more than five percent. We are still conducting studies to study new export destinations including to Australia. At the same time we are also trying to remain focused in terms of maintaining the stability of export performance in the new destination countries for expansion in 2018 such as Africa and Latin America," said Warih Andang Tjahjono, President Director of PT. Toyota Motor Manufacturing Indonesia (TMMIN), Friday (2/1/2019).

All CBU vehicles exported to various countries manufactured in Indonesia with Domestic Content reaching 75 percent to 94 percent.

Until now there have been at least more than 80 countries in Asia, Africa, Latin America, the Caribbean and the Middle East which have become Toyota's export destinations.

World macroeconomic conditions are a challenge for the performance of domestic automotive exports. In response to this, Toyota views that industrial competitiveness is the key to being able to survive and even win the competition.

"There is no way other than increasing the competitiveness of domestic industries from upstream to downstream to be able to maintain Indonesia's position as one of the production and export bases in the Asia-Pacific region. The increase in true localization of products starting with the use of domestic material sources is a fundamental effort to maintain competitiveness. At the same time, these activities can help suppress the import of raw materials so that they can contribute to the stability of the trade balance, especially in the automotive component sector, which is currently still a concern of the Government," added TMMIN Director Bob Azam.

Positive trade balance in the downstream sector still leaves homework in the world of the national automotive industry because in fact the trade balance in the upstream sector of the automotive supply chain, especially at the supplier level of the second and third tier components, is still negative.

One of the causes of this problem is that there are still many raw materials for the automotive manufacturing industry that are sourced from overseas. This then influenced the Domestic Content of Indonesian automotive products. So many imported materials make pure Domestic Content or true localization not as high as expected.

Bob Azam added deepening Domestic Content is still a serious issue because it is generally a burden on the responsibility of small industries that act as suppliers in the second or third tier. Inefficiency becomes one of the fundamental obstacles to the operation of small industry businesses in Indonesia.

To combat these inefficiencies, continuous effort is needed in building Human Resources, especially debriefing basic skills, which in turn will play a role in increasing efficiency.

Concerning efforts to improve the level of pure Local Content/true localization, since 2004, TMMIN has used local steel for certain vehicle parts.

In 2017, two types of raw materials, resin, in collaboration with PT Chandra Asri Petrochemical Tbk (CAP), and non-woven fabric, in collaboration with PT Herculon Carpet, have been localized, after previously in 2016, working with PT Pertamina, localized the lubricant engine oil.

TMMIN is currently in the process of researching and developing the use of local aluminum to be used on wheel discs in collaboration with INALUM and Pako. Pure Domestic Content of Toyota products are at 65 percent. In the future, Toyota aims to achieve true localization to the level of 80 percent by 2020.