ASEAN as a Global Automotive Hub:

Challenges for Industry and Higher Education

Institution – Indonesia PerspectiveGreen Drive Project Conference, Antwerpen, 22-23 Sept 2016

Andi Isra Mahyuddin,

Tatacipta Dirgantara,

Sigit Puji Santosa

Faculty of Mechanical and Aerospace Engineering

Institut Teknologi Bandung, INDONESIA

World GDP (2015)

0 5 10 15 20

GD

P (

$ t

rilio

n)

USA

CHN

JPN

DEU

GBR

ASEAN

FRA

IND

ITA

Source: World Bank Data

17.95

10.87

4.12

3.36

2.85

2.44

2.42

2.07

1.81

GDP Growth (2015-2019)

Country GDP Growth (%)

China 6.8

India 6.7

Average of ASEAN 5.6

Indonesia 6.0

Malaysia 5.6

The Philippines 6.2

Thailand 4.1

Vietnam 5.7

Source: OECD Development Centre

GDP Per Capita ASEAN (2015)

CountryGDP Per

Capita ($)GDP Growth

Per Capita (%)

Singapore 52.888,7 0.8

Brunei Darussalam 36.607,9 -1,9

Malaysia 9.766,2 3,5

Thailand 5.816,4 2,5

Indonesia 3.346,5 3,5

The Philippines 2.899,4 4,2

Vietnam 2.111,1 5,5

Lao PDR 1.812,3 5,2

Myanmar 1.203,5 6,1

Cambodia 1.158,7 5,3

Source: World Bank Data

Global Middle Class 2012

$16-$100 per day

Global Middle Class 2020

$16-$100 per day

Global Automotive Production

0

5

10

15

20

25

Production 2014 (millions)

6th-3.9

Global Automotive Sales

0

5

10

15

20

25

30

35

40

Actual Sales 2014 (millions)

Projected Sales 2020 (millions)

6th-3,3 5th-4,5

Vehicle Production Road Map - Indonesia

2,5 m by 2020

Vehicle Growth in Indonesia

Source: Indonesian Central Bureau of Statistics

ASEAN Safety Forum

0

20

40

60

80

100

120

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

To

tal C

ou

nt

(Millio

ns)

Year

Bus Truck Motorcycle Passenger Car

15 %

Growth

Daniel H.T., Meragukan Efektifitas Yellow Box Junction, http://www.kompasiana.com/

http://cdn-2.tstatic.net/tribunnews/foto/bank/images/20140410_174340_jakarta-kian-padat.jpg

Challenges For Industry

Market domination by Japanese OEM

brands:

• Long history in the market

• Comprehensive portfolio, dealer networks

• High brand awareness

New OEM market entry will need to

develop differentiated and focused value

proposition to target specific consumer

segments

Energy, Environment,

Safety

Efficient and Safer

Issues in Automotive Technology

Energy Efficient Vehicle

Fuel-efficient Internal Combustion Engine

Hybrid Vehicles

Electric Vehicles (EV)

Compressed Natural Gas (CNG)

Liquified Petroleum Gas (LPG)

Biodiesel, Bio-Ethanol

Hydrogen, Fuel Cell

Challenges For Higher Education

Institution (HEI)

Little/ No Vehicle Engineering & Development Activity :

• All design/Development done at the OEM home country

• Manufacturing based still controlled and supported by OEM’s suppliers

• Local content policy by government targets part design and production

HEI will need to provide technological solution and to engage OEM/local suppliers to support local content policy

ASEAN as Global Hub

HOW To

• stimulate innovation and the global competitiveness

• boost workforce skills and improve per capita income

• improve the environmental friendliness & increase the vehicle safety

National Automotive Policy in

ASEAN

• Promote green technologies and better

fuel economy through incentives

• Local content targets for part design

and production – To increase economic

multiplier effect

• Free Trade Agreements with ASEAN,

Japan, and China – Cost reduction of

20-50% through no levies and low tariffs

Increase Global Competitiveness

Automation and Robotics in Manufacturing Plant

Decrease manual workforce

Increase the demand of highly skilled talents

National Center for

Sustainable Transportation

Technology (NCSTT)

downstream research in collaboration with industries

stimulate new innovations and acquisition of technologies

capacity building of local manufacturers especially SME’s that produce automotive parts and components

Research Innovation with Industries @NCSTT

• Delivery vehicle

e-Trike

• ITB-Indonesian

Postal Office

• Mass production

2017

• R&D on Electric

Mass Transport

• National

electric vehicle

consortium (5

Indonesian

Universities)

• Development

of Train Seat

Interior

• ITB - PT DTI

National Electric Vehicle Research ROAD MAP (Phase 2: 2016-2020)

22

2016

2017

2018

20192020

Grand design

and concept

vehicle

Component &

Subsystem

development

Prototyping/v

alidation

Certification &

Manufacturing

Confirmation

Mass

Production

• Consortium of 5 national universities Led by ITB

• Started in 2012

• Government funding ($10M)

National Electric Vehicle Development

Strategy

NCSTT

Government Ministries: National DevPlanning Board, State Own

Companies, Industry, Research Technology HE, Transport, Finance

National Automotive

Industry

University and

Research Institution

Platform Development

City Car

Modern design

& simple

Compact vehicle4 passengers

and cargo

120 km

Lightweight

Technology, Cost,

Risk

Single Platform

Multifunction

Single Motor

40-60 kW

MOLINA

24

Service to Industry

Product Development

Technology Acquisition

Planning Manufacturing System

Get the know-why and know-how

Training

Industrial services

• Development

of Silent Chain

• ITB - PT Astra

Otoparts

• Automation of

Spring

manufacturing

Equipment

• ITB - PT Chuo

Spring

Indonesia

• Development

of testing

machine for

shocks and

struts

• ITB - PT KYB

Indonesia

Industrial Internships

Industrial Internships

Real Industrial Project

Availability of students & supervisor

Long term recruitment

process

First hand experience & in-depth exposure

Up stream Research

alternative fuel (including bio-fuel)

vehicle safety

advanced material development

green manufacturing technology

environmental impact assessment

Up stream Research

Metro Capsule –Mass Transport

Bio-Diesel Catalyst ITB-Pertamina

Bio Fuel Research ITB-BMW

Crash Box Design

Bus Roll Over Bus Roll OverAdvancePorous

Material: Al FoamNatural Fiber Composites

Concluding Remarks

• All stake holders should work in synergy

• ASEAN automotive market is expected to grow steadily at a CAGR of 6.4%, to reach 4.9 m vehicles in 2020

• ASEAN automotive production is expected to grow at a CAGR of 8.6% , to reach 7.6 m vehicles in 2020

• ASEAN to be the global production hub, with Indonesia to be the largest automotive market in the region by 2020

• Japanese OEM to continue to dominate ASEAN markets. New entry OEM will need to create intense competition with aggressive product offerings

• Higher Education Institution will need to support technological solution for part localization content strategy

THANK YOU

Global Automotive Production

(2014)2014 Global production (Actual)

Rank Country Production

(millions)

1 China 23.7

2 USA 11.7

3 Japan 9.8

4 Germany 5.9

5 South Korea 4.5

6 ASEAN 3.9

7 India 3.8

8 Mexico 3.4

9 Brazil 3.1

10 Spain 2.4

EU-ASEAN Business Council, ASEAN – An Emerging Global Automotive Hub in the

Making, 2015

Global Automotive Sales2014 Global Sales

(Actual)

2020 Global Sales(Projected)

Ran

kCountry

Sales

(millions

)

Ran

kCountry

Sales

(millions

)

1 China 23.5 1 China 34.5

2 USA 16.8 2 USA 17.4

3 Japan 5.6 3 India 7.7

4 Brazil 3.5 4 Brazil 4.9

5 Germany 3.4 5 ASEAN 4.5

6 ASEAN 3.3 6 Japan 4.3

7 India 3.2 7 Russia 3.6

8 UK 2.8 8 Germany 3.4

9 Russia 2.6 9 UK 2.8

10 France 2.2 10 France 2.6EU-ASEAN Business Council, ASEAN – An Emerging Global Automotive Hub in the

Making, 2015

World GDP (2015)

2014 Global production (Actual)

Rank Country GDP ($

millions)1United States 17.946.996

2China 10.866.444

3Japan 4.123.258

4Germany 3.355.772

5United Kingdom 2.848.755

ASEAN 2.442.472

6France 2.421.682

7India 2.073.543

8Italy 1.814.763

9Brazil 1.774.725

10Canada 1.550.537 World bank data