Jakarta (ANTARA) - Cooperatives and Small and Medium Enterprises (SMEs) Minister Teten Masduki called on automotive industry players in Indonesia to increase partnerships with micro, small, and medium enterprises (MSMEs) that provide automotive parts to support downstreaming.

“I invite the automotive industry to participate in developing automotive MSMEs through partnerships to be able to level up,” he stated in a discussion here on Friday, according to a press release from his ministry.

Based on data from Statistics Indonesia (BPS), the automotive industry in 2023 contributed Rp311 trillion (around US$20.01 billion), or about nine percent of the total gross domestic product (GDP) of the non-oil and gas processing industry.

During the 2018-2023 period, the automotive industry recorded a growth of 4.1 percent.

Data from the Association of Indonesian Automotive Manufacturers (Gaikindo) showed that the production of four-wheeled vehicles in 2023 reached 1.395 million units. Meanwhile, data from the ASEAN Automotive Federation (AAF) showed that the production of two-wheeled vehicles reached 5.2 million units.

According to Masduki, automotive SMEs’ capacity is good, as they can supply 65 percent of the parts of vehicles and heavy equipment.

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To this end, he stated that the presence of MSMEs providing automotive parts cannot be downplayed, especially since Indonesia is currently building the electric vehicle (EV) ecosystem.

"The EV industry trend also provides greater opportunities for MSMEs to forge partnerships as a supply chain for the vehicle assembly industry," he stated.

In an effort to encourage MSMEs to produce automotive parts, the government has issued Government Regulation Number 10 of 2021 concerning Investment. In this regulation, large-scale auto parts industries are required to partner with auto parts SMEs.

Moreover, the Ministry of Cooperatives and SMEs has built a joint production house to encourage the development of an inclusive automotive industry ecosystem.

"Through collaboration, innovation, and strong partnerships, we ensure that MSMEs in Indonesia not only grow and develop but also contribute to the national economy and sustainable economic development," he remarked.

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Translator: Shofi Ayudiana, Raka Adji
Editor: Yuni Arisandy Sinaga
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