The President Post T H E
S P I R I T
O F
IDR 20,000
I N D O N E S I A
Display until April 12, 2012 /// N0. 33
www.thepresidentpost.com
Soebronto Laras:
Improving Infrastructure More Important than Producing Fuel-efficient Cars
T
he automotive sector plays an important role in driving Indonesia’s economy. Global automotive industry finds Indonesia’s vast market very lucrative after China because the country has the biggest population in Southeast Asia. In terms of domestic sales in Asean countries, Indonesia enjoyed a 30.6% market share, slightly behind Thailand with 32% followed by Malaysia in third place with 24.2%. Indonesia is a lucrative market for automotive products due to its renarkable economic growth, low inflation and stable interest rates. Car sales growth in the country is expected to soar by 50% over the next five years. Subronto Laras, who successfully made Suzuki a big name in Indonesia, recently expressed his views to The President Post about the future of Indonesia’s automotive industry. The following are excerpts of the interview: What’s your opinion about the innovation of fuel-efficient cars? Many manufacturers have been designing fuel-efficient cars over the past few years by adopting the hybrid system. On the other hand, several other car manufacturers, for instance luxury cars, use TDI-Turbodiesel Injection and this is also an innovation of fuel-efficient cars. But these cars can run fast when needed because they are equipped with turbo machines. I think hybrid cars will sell out in the future. Aside from being fuel-efficient, hybrid cars are also environmentally-friendly. As for hydrogen and water-fueled cars, Indonesia is unlikely to get it any time soon. Right now, the government has a program that calls for the use of CNG (compressed natural gas) or popularly known as BBG because it’s very cost-effective. The government is even planning to offer subsidy for the purchase of the converter. What about Green Cars? Green Car or Low Cost or also called Economy Car will become a concept that world car manufacturers, including Indonesia, will adopt in the future. The fuelefficient car will use 22km/liter fuel and will become an environmentally-friendly and affordable car. Most of them will use below 1,200cc-engine .
Why hasn’t Indonesia become a market leader in Asia? The country’s biggest problem, in my opinion, is that infrastructure across the board is still not in place. Moreover, we are a country that always seems to be skeptical and unfocused; still lulled by our good fortune in we are blessed with that we want to do everything at once. This makes us to lose focus. If the market is our main focus, and we have a population of more than 240 million, that’s an extraordinarily big target market, especially since we will be entering the Asean free trade area in 2015. We need to also look at the people’s purchasing power. Our GDP has recently reached Rp3.7 million, which is of course still way below that of our neighboring countries such as Singapore, Malaysia, and Thailand. To strengthen our country’s economy, the private sector and the government need to cooperate or synergize.
The country’s biggest problem, in my opinion, is that infrastructure across the board is still not in place. Subronto Laras
What’s your opinion about the traffic congestion in Jakarta and the lack of safe and convenient mass transportation that force people to eventually resort to two-wheeled vehicles? The number of motor cycle users in Indonesia has now reached 60-70 million and their fuel consumption is definitely lower than four-wheeled vehicles. But this eventually became a boomerang. Too many two-wheeled vehicles had caused the traffic congestion to become worse because they drive as they like and they don’t pay attention to traffic regulations. What’s your opinion about Indonesia’s human resources? Our human resources are generally good as they have good skills. They are as good as that of other countries’. How many million workers are absorbed by our automotive industry? Many, because the automotive sector needs many workers. They are needed to make main components, in the supporting industry and in other divisions such as marketing, and many more. One car factory has at least 200 sub-contractors. The motorcycle industry needs even more. It’s small but it’s labor-intensive. Car factories also get some help from
robots (machines), for instance, to paint the body. As for motorcycles, each part is done by a human being. What’s your opinion about the future of Indonesia’s automotive industry? I have a few notes on this subject. First of all, Indonesia has to improve its infrastructure. It would be pointless to have fuel-efficient cars if the traffic is still congested. Secondly, the Indonesian people in general have a big family. They tend to buy a comfortable mini buses for their family. Thirdly, the safety factor. City cars will not offer comfort and safety on the road given the reckless driving behavior of truck or bigger car drivers, not to mention other problems such as floods and others. So, mini buses such as Avanza, Xenia, Suzuki Ertiga, which will soon be launched, will continue to be the choice of the Indonesian people over the next five years. Indonesia will also become the production base for 7-seater cars that will use local contents. Another example is Suzuki APV, a vehicle with an Indonesian design, in the sense that the design was tailor-made for the need of the Indonesian people which mostly have a big family. 80% of the car’s components are locally made.
The President Post/Heros Barasakti
BUSINESS
Freeport Urged to Divest 51% of Shares to Indonesia
Currently, the Indonesian government holds only 9.36% of Freeport shares, which it has held since the working contract with Freeport was first signed in 1967. PAGE B2
INTERNATIONAL
The 3rd Pasar Malam Indonesia Promotes “New Indonesia” to Dutch Community
Pasar Malam Indonesia 2012 attracts more than 8.500 visitors, both local Dutch and Indonesian to enjoy the authentic taste of Indonesian cuisine. PAGE B7
TECHNOLOGY
iMulai 4.0 Raising Indonesian IT Startups
LIVING
Who Gets More Vacation Days?
The event is in its fourth year, and intends to encourage Indonesian startups to submit their ideas for new products or new services that can help entrepreneurs do business.
Germany, France, Spain and Denmark top the list with 30 paid vacation days, while the Netherlands, Sweden, Norway and the UK come in second with 25 days.
PAGE B8
PAGE C6
Five RI BUMNs To Go Public Investors generally prefer and target IPO shares of stateowned companies, as well as "shares of large state-owned companies." State enterprises minister Dahlan Iskan has said five BUMNs (state-owned companies) would conduct an IPO (initial public offering) of stocks this year. "One of the companies is cement producer PT Semen Baturaja," he said at the Indonesia Stock Exchange here on Wednesday. Four other companies that are to go public are subsidiaries of state-owned companies. "I could not as yet announce their names, but I could say with certainty they would conduct an IPO this year," he said. He further said the decision to list the companies was made so that the parent companies would not have to tightly control them. He added that through an IPO there would be other institutions that would control them, besides the parent companies. "Control of them would be more open, so the parent companies need not control them as much since there will be other parties that would also manage them," he said. The president director of the Indonesia Stock Exchange, Ito Warsito, had recently expressed hope that the government would en-
I could not as yet announce their names, but I could say with certainty they would conduct an IPO this year." Dahlan Iskan State Enterprises Minister courage state-owned companies to list their shares at the stock exchange to draw foreign funds to the country. "The IPO of state-owned companies is expected to become a way of collecting investment funds for infrastructure development," he said. Research analyst of PT Panin Sekuritas Tbk., Purwoko Sartono, said investors generally prefer and target IPO shares of state-owned companies, as well as "shares of large state-owned companies."
The IPO of stateowned companies is expected to become a way of collecting investment funds for infrastructure development," Ito Warsito The President Director of The Indonesia Stock Exchange