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Indonesia wants to woo Italian automobile industry giants
like Ducati Motor Holdings, Fiat S.p.A. and Piaggio to invest in
Indonesia, Indonesian Automotive Manufacturers Association (GAIKINDO)
chairman Bambang Trisulo said Thursday in Naples.
"With its huge population, Indonesia is a potential market and a
strategic place for automotive assembling and manufacturing.
Unfortunately, Italy does not have a big presence in Indonesia. We
would like to invite Italian automobile companies to Indonesia,"
Bambang said at a business workshop Thursday titled "Economic
Cooperation with Southeast Asia".
The workshop formed part of the 5th EuroSeas Conference, which is being
held from Sept. 12 to 15 in the Italian city of Naples.
"For the first time, we are organizing this business forum as part of
EuroSEAS in order to overcome the perceived divide between the
scientific community and the so-called 'real world', said Prof. Pietro
P. Masina, one of the organizing committee executives.
The European Association for Southeast Asian Studies (EuroSEAS) is a
professional and non-profit organization made up of European scholars
focused on Southeast Asian affairs.
According to Bambang, Italian automobile companies know little about
the potential of the Indonesian market.
"It seems they do not know that we are the world's third biggest
producer of motorcycles after China and India. Only one Italian
company, Piaggio, is currently present in Indonesia. It sold just 915
motorcycles in Indonesia in 2005," Bambang told The Jakarta Post on the
sidelines of the workshop Thursday.
In 2006, China and India were the two biggest producers of motorcycles
in the world with 21.44 million and 8.38 million units respectively.
Indonesia was third on 4.46 million.
Indonesia has been the darling of motorcycle manufacturers from China,
South Korea, and India in recent years. Japan has been the market
leader in Indonesia with a 90 percent market share for many years.
According to Indonesia's Investment Coordinating Board (BKPM), realized
foreign direct investment in the automotive sector amounted to US$438.5
million in 2006.
Bambang said that Indonesia's vehicle sales stood at 318,000 units in
2006. The previous year, 2005, they hit a record high of 534,000
vehicles.
"The drop was due to the more than doubling of gas prices last year.
This had multiple effects on the public. But this year, sales have
picked up and will reach between 350,000 and 400,000," Bambang said.
Indonesia, Bambang said, had introduced various rule changes, including
the relaxing of the local content requirement in the case of completely
built-up units (CBUs), and introduced tax breaks for new investments.
"We would like to invite big Italian companies like Fiat, Ducati and
Piaggio to invest in Indonesia.," Bambang said. "If they come, it will
help Indonesia reach its target of selling one million vehicles, or
joining the one-million club, by 2010," he said.
In an earlier session Wednesday, the chairman of the Indonesian
Footwear Association, Eddy Widjanarko, presented a paper on the
investment and business climate in Indonesia.
Another Indonesian participant, the vice president of the Indonesian
Textile Association, Ade Sudradjat, will speak about Indonesian the
textile and garment industry Friday.
"Italy is a very promising market for our textile products. I will
explain to my Italian counterparts, especially from the Campania
region, about our quality products. We are already exporting to a
number of other European countries," Ade told the Post.
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