ASEAN-Japan Centre (AJC) hosted a webinar on “Promoting Resilient Supply Chains in the Automotive Industry in ASEAN and Japan through Free Trade Agreements (FTAs)” on August 25, 2022. The webinar provided an avenue for discussion on how free trade agreements could help promote resilient supply chains in the automotive industry.
About 140 participants from the business, academe, and government sectors of Japan and ASEAN Member States participated in the webinar. Based on the online poll conducted during the webinar, 98% of the respondents found the session informative and 83% believed that FTAs could promote inclusive and sustainable trade in the automotive industries.
Resource speakers for the webinar
- Mr. Mitsuhiro Matsumoto, Vice Senior Economist, Macro-economic Research Center, Economics Department, The Japan Research Institute, Limited, presented on what strategy should Japanese auto industry take as ASEAN aims to expand electric vehicle (EV) market. He shared about the EV policies of Indonesia, Malaysia, Philippines, Thailand, and Viet Nam as well as Japanese investments in these countries; and he mentioned the two strategies that Japanese companies could undertake are expansion of EV automobile demand, and conversion of gasoline vehicles to EVs. Moreover, he explained that EV shift is global trend, and how this movement will affect Japanese companies and the macro economy. Also, he analyzed the growth potential of automobile demand in ASEAN and the two main factors, namely electric power and finance, for the shift from gasoline vehicles to EVs. As the result of the analysis, he suggested the strategies which Japanese companies should take for this EV trend.
2. Mr. Dusit Anantarak, Senior Expert, the Office of Industrial Economics (OIE), Ministry of Industry, Thailand, gave a presentation on “The Big Challenges to Supply Chain of Thai Automotive Industry and Supporting Policies/Measures from Government”. He shared that ASEAN and Japan are key players in the global automotive industry contributing 14% to world production. He believes that ASEAN FTAs, including AJCEPA and RCEP, have created good trade and investment opportunities that contributed to the building of a resilient auto supply chain in ASEAN and Japan. The Thai automotive industry, for instance, have, not only assembly factories, but also the research and development centers of top Japanese carmakers. Thailand’s motor cars, parts and accessories have an average of 70% local value added, and it is Thailand’s top export sector. Thailand manufactures for some of the world’s leading car companies and exports mainly to the US, China, Indonesia, India, and Germany. Electric vehicles are playing an important role in reducing emission towards a sustainable environment, and Thailand has set its long-term strategy for increasing EV use and reducing use of gasoline vehicles.
3. Mr. Cahyo Purnomo, Director of Investment Promotion for East Asia, South Asia, Middle East and Africa, Ministry of Investment/Indonesia Investment Coordinating Board, presented on “Indonesia Investment Opportunities and Investment Updates in Automotive Supply Chain Industry”. He shared that Indonesia is the largest automotive market in Southeast Asia. The automotive sector is one of the top ten investment sectors in Indonesia with Japan as the biggest investor. To achieve a zero-emission energy system by 2050, Indonesia is following an “Electric Vehicles Ecosystem Development from Mining until Recycling”. He also shared that some of the benefits of the Indonesia-Japan Economic Partnership Agreement (IJEPA) are: (1) improved market access, (2) increased investment in Indonesia, especially in the manufacturing industry through a scheme called USDFS, which is set to exempt import duties for Japanese raw material products to be used in production process of Japanese companies such as automotive & components, and (3) improved capacity building by supporting industries, including for SMEs, which will be beneficial for industrial development in Indonesia.
