Indonesia Joins Malaysia in 'ASEAN Car' Project  

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  • Presiden Jokowi menerima kunjungan dari Perdana Menteri Malaysia, Najib Razak, di Istana Merdeka, Jakarta, 20 Oktober 2014.  TEMPO/Subekti

    Presiden Jokowi menerima kunjungan dari Perdana Menteri Malaysia, Najib Razak, di Istana Merdeka, Jakarta, 20 Oktober 2014. TEMPO/Subekti

    TEMPO.CO, Kuala Lumpur - Malaysia and Indonesia plan to start the ASEAN car project. Malaysian Prime Minister Datuk Seri Najib Razak said President Joko Widodo has expressed interest to take part and help implement in Malaysia's idea. Malaysian car manufacturer Proton Holdings Bhd is expected to be involved in the project with Indonesia.

    "This means Proton and Indonesia will launch the ASEAN car as a viable project after in-depth studies," Najib told Malaysian newspaper the New Straits Times. Najib gave no details how both countries would participate in the project.

    The Financial Times yesterday wrote that the dream to have an "ASEAN car" was first posed by Malaysia's former PM Mahathir Mohamad, when he initiated the creation of Proton in the 1980s. The idea was for Malaysia to have a national car company that exports to Southeast Asia and beyond.The idea did not work as Proton failed to tap into overseas market, losing the competition to Japanese and European cars.

    The ASEAN car idea is based on the huge market potential in the region. ASEAN is the world's fifth biggest automobile market after Brazil, with total sales of 3.5 million units in 2013. With a low level of private car ownership in its 10 member countries, the increasing purchasing power, the growth of the region's middle class, and urbanization, ASEAN is seen as a potential market for automotive products.

    Automotive observer Suhari Sargo the program would not be an easy one. To take part in the program, Indonesia must have technologies that are equivalent to Malaysia. Otherwise, Indonesia will only serve as market.

    "In Malaysia, Proton's technology is controlled by their government. Meanwhile, our technology comes from Japan," Sargo told Tempo yesterday.

    Another issue, Sargo said, is the distribution and the supply chain of raw materials and components. Indonesian should benefit in this, and not let Malaysia have control over everything. "The government should be firm, so that there is a clear view on the involvement portions between Malaysia and Indonesia," he said. 

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