INAPA – 26th March 2010

Presented by Mario Montino

Consultant

Automotive & Transportation

Global Trends in Automotive and

Auto Parts Industries:

The Implications for Indonesia

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Content

3 Implications for Indonesia

1 Trends in Global Automotive Industry

2 Trends in Global Auto Parts Industry

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4

5

6

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Content

3 Implications for Indonesia

1

Trends in Global Auto Parts Industry2

Trends in Global Automotive Industry

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Percentage of Electronics components is increasing in vehicle components

Electronics Content in Car as % of Total

0%

25%

50%

75%

100%

2000 2010

Others

Electronics

Tier I companies like Siemens, Visteon, Denso etc who are

active in electronics are benefiting from this trend

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3

Trends in Global Automotive Industry1

Implications for Indonesia

2 Trends in Global Auto Parts Industry

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, How about Indonesia?

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Global OEMs plans to build

manufacturing facilities or

increase their investment in

Indonesia

Current Automotive Business Environment Poses Huge Challenges for Indonesia with Opportunities along-side

Opportunities and Threats for Indonesia in Current Automotive Business Environment, 2010-2012

CurrentBusiness

Environment

Higher tax burden

on cars in

Indonesia

Falling Consumer

Confidence due to

“Recall” trends

Foreign investment in

auto parts industry is

increasing

The Indonesia

Government plans for

Low-cost and Fuel-

efficient Eco cars

production by 2012

Reluctances of OEMs in

Indonesia to transfer its

technology

Lower growth for

some car segments

and brands

Limited capabilities

of Indonesian local

auto part makers

New growth

opportunity for the

Indonesian domestic

component industry

Potential increasing

production volumes

from current

automotive

manufacturers

Government support for

local part manufacturer

through incentives &

programs

Increasing demand in

domestic and export

markets after economic

recovery

Opportunities

Threats

Source: Frost & Sullivan

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Key Issues and Trends in Global Automotive Markets

Global Issues & Trends Implications for Indonesia

1After Global Economic recovery, markets

world over are likely to grow

• Higher demand from Export and domestic market for

Indonesia automotive and auto parts players

• Challenges for Indonesia to increase its component

quality to meet the global standard.

2

Developing Economies, especially in Asia

will be the driver of future growth in

automotive industry

• Global OEMs planning to invest in Indonesia automotive

industry or to increase their investments

• Increasing competition among Asian countries in tapping

the growth opportunities

3

Emergence and continuous trends of Low

cost, basic, small, lower mid size and eco

cars creating the next growth opportunities

• The same trend is happening regionally in Asia and

ASEAN, supported by many Free Trade Agreements

(China-ASEAN FTA, India-ASEAN FTA, etc)

• Indonesia is targeted as one of the potential market by

OEM regionally to sell their low cost small car

4Global trends in increasing electronic,

telematic, and eco-parts

• Potential increasing imports of electronic component

• Indonesia needs to assess its part manufacturing

capabilities and positioning regarding electronic parts

5Emergence of Tier 0.5 Suppliers or system

integrators

• Indonesian local part industries need to evaluate the

trends and partner with the right global Tier 0.5 suppliers

• Research and development needed to increase the

capabilities of Indonesian local auto parts

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Frost & Sullivan in A Nutshell

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Dewi NurainiCorporate Communications

Indonesia

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Email : dewi.nuraini@frost.com

For Additional Information

www.frost.com

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