Opportunities Wide Open

KOMPAS/RIZA FATHONI

President Joko Widodo, accompanied by Industry Minister Airlangga Hartarto (standing, front), tries out a light truck produced by PT Kiat Mahesa Wintor during the Indonesia International Motor Show 2018 at JI. Expo, Kemayoran, in Jakarta on Thursday (19/4/2018). During the opening of the “Your Infinite Automotive Experience” motor show, the President said Industry 4.0 could drive technological progress in the automotive industry and open up new opportunities.

JAKARTA, KOMPAS – It is believed Industry 4.0 will bring not only disruption, but also enormous opportunities in the automotive sector. The automotive industry must move fast to prepare for and to face the fourth industrial revolution.

President Joko “Jokowi” Widodo made the statement w on Thursday hen he opened the Indonesian International Motor Show (IIMS) 2018 at the Jakarta International Expo in Kemayoran, Central Jakarta .

Cabinet Secretary Pramono Anung, Industry Minister Airlangga Hartarto, Kompas Gramedia CEO Lilik Oetama and executives of authorized automotive distributors (APM) also attended the opening ceremony of the annual exhibition

According to the President, the fourth industrial revolution would bring drastic changes, including the possibility of shrinkage in the automotive industry due to more efficient production and integrated automotive technologies.

"An electric car, for example, from the information I received, only uses 10 percent of the components used in a conventional car," said the President. The transition may change the scopes and types of jobs the industry required. However, the President said he did not believe the automotive industry would shrink in the future. Instead, Jokowi was upbeat that both job and business opportunities in the automotive sector would remain promising.

"I believe, with the fourth industrial revolution, the auto sector will continue to grow. The number of jobs needed in the automotive and car transport sectors will also increase, not decrease," he said.

President Jokowi said that changes in the types of jobs in the industrial sector could not be avoided. However, new types of employment would replace the jobs that disappeared. "The transition to next-generation automotive technology from the current technology will open tremendous opportunities. What we must do is to be well informed and to closely monitor [the situtation], to observe quickly, to explore quickly and to prepare quickly," said the President.

For example, with the growing popularity of app-based ride-hailing services, a private car that is usually used for only two to three hours a day could be turned into a public car and used continuously.

As a result, maintaining the car engine and body would become more important. This could create new business opportunities in car wash and repair services. Car sales will also grow as their lifespan was shortened from regular use.

New jobs

BMW Group Indonesia vice president of corporate communications Jodie O\'tania shared the President’s view that the emergence of electric cars would instead create many new jobs, because they would create a new automotive ecosystem.

"We are talking about charging stations at public facilities. We also need people to manage the applications that enable us to see the location of public charging stations. We are also talking about spare parts. All this can potentially provide more jobs," said Jodie.

Enny Sri Hartati, director of the Institute for Development of Economics and Finance (Indef), pointed out that the fourth industrial revolution could open new opportunities if human resources were well prepared to use technology.

"Industry 4.0 is not all about technology-intensive industries. It can also apply new technology to optimize production. However, human resources must be fully prepared," said Enny.

President commissioner Lilik Oetama of PT Dyandra Promosindo, which organized the IIMS 2018, said the auto show featured a wide range of cars from 38 brands. The IIMS 2018 targets attracting more than 500,000 visitors during the 11-day expo and booking more than Rp 3 trillion in total transactions.

Exports

Industry Minister Airlangga Hartarto said Indonesia\'s car exports also continued to increase. The production of four-wheeled vehicles rose to 1.21 million vehicles in 2017 from 1.17 million vehicles in 2016.

Meanwhile, total exports of completely built up (CBU) cars rose to 231,000 vehicles in 2017 from 194,000 vehicles in 2016. Automotive components exports even increased by 13-fold to 81 million parts in 2017 from 6.2 million parts in 2016.

The main industry players are optimistic that the automotive market will improve this year. A number of authorized distributors reported an increase in sales in the first quarter compared to the same period last year.

Karyanto Hardjosoemarto, deputy director of sales operations and product management at PT Mercedes-Benz Distribution Indonesia, said that sales of Mercedes-Benz passenger cars rose by 16 percent year-on-year in January-March.

PT Toyota Astra Motor vice president director Henry Tanoto also said the company had seen an increase in the sales of Toyota cars in the first quarter. "Although the increase is not very high, still below 5 percent, there has been an increase compared to the same period last year. We expect the trend to continue throughout this year," he said.

(INA/OSA/DHF/RZF/DD16)