ASEAN is now poised as the hotspot for global automotive manufacturing, with much credit given to Indonesia. The increasing number of Original Equipment Manufacturers (OEMs) has played a pivotal role in driving the demand in the automotive industry. With that in mind, the South East Asia Automotive Summit 2014 gathered key industry stakeholders, such as global car OEMs, government bodies, associations, as well as manufacturing solutions providers and consultants, to discuss the market outlook and potential business opportunities present in the automotive industry in Indonesia

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Topic
1 Overview of ASEAN Automotive Industries
2 Factor that influence Automotive Localization
3 Capitalize the strength of ASEAN OEM’s
4 Key focus area of OEM’s localization
5 ASEAN Localization Opportunity
Agenda

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Rethinking Your Localization Strategy
Overview of ASEAN Automotive Industries
141,000 157,000 180,000
730,000 700,000 750,000
2011 2012 2013
Vehicle Sales Motorcycle Sales
110,000 80,000 94,000
3,700,000
3,100,000 3,000,000
2011 2012 2013
Vehicle Sales Motorcycle Sales
850,000 1,100,000 1,200,000
6,800,000 7,000,000
7,700,000
2011 2012 2013
Vehicle Sales Motorcycle Sales
600,000 620,000 650,000
490,000 530,000 540,000
2011 2012 2013
Vehicle Sales Motorcycle Sales
790,000
1,400,000 1,300,000
2,000,000 2,100,000 2,000,000
2011 2012 2013
Vehicle Sales Motorcycle Sales
ASEAN Automotive Industry Development in The Last 3 Years

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Rethinking Your Localization Strategy
Factor that Influence Automotive Localization - 1
EXTERNAL FACTOR INTERNAL FACTOR
LOCALIZATION STRATEGY – Key Focus Area
SPIRE Conceptual of Automotive Localization Strategy
Manufacturing (Production Capability & Flexibility)
Material Purchasing (Sourcing of material and origins)
R&D (Adaptations & Organization)
Logistics (Delivery Structure)

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Rethinking Your Localization Strategy
Factor that Influence Automotive Localization - 2
Topography, infrastructure,
traffic condition
Average income,
purchase power,
currency fluctuation,
labor cost & productivity,
vehicle cost of
ownership
Climate change,
emission control
Gasoline quality, material
usage & availability,
multimedia,
arts/component
development
Government policy,
environmental policy, safety
regulation, tax regulation,
fuel regulation
EXTERNAL FACTORS
THAT INFULENCE
AUTOMOTIVE
LOCALIZATION

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Rethinking Your Localization Strategy
Factor that Influence Automotive Localization - 3
Type or production
capability, on-Time
production, high
quality product
Variety parts can
be build vs.
specialized parts
OEM’s
Capacity & capability of OEM
company in production,
investment in technology
INTERNAL FACTORS
THAT INFULENCE
AUTOMOTIVE
LOCALIZATION

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Rethinking Your Localization Strategy
Capitalize the Localization Strength for ASEAN OEM’s
ASEAN OEM’s
Opportunity
EXTERNAL FACTOR INTERNAL FACTOR
KEY HIGHLIGHT KEY HIGHLIGHT
Low-end passenger car is consider to be
the highest market demand among
other type of passenger vehicle
Opportunity for mass production of low-
medium class passenger impact to the
mass production of OEM parts/
components
Small ECO car forecasted to continue
with projection of production about 2.5
million units around 2015
Thailand considered as the production
bas of vehicle and OEM parts/
components in ASEAN especially in
applied automotive technology
Malaysia also expand their local brand
into several country, e.g. Indonesia.
Malaysia establishment of their local
vehicle brand Proton and Perodua
create more focus to the local brand
and local OEM parts.
Increasing of 2-wheeler OEM parts
maker
Low labor provided competitiveness as
a supplementary base for automotive
industry
In several years, Vietnam considered as
3rd option for the OEM parts/component
maker to build their plant in Vietnam.
The Philippines looks to rebuild and
recapitalized their automotive industry.
Supply base in ASEAN for transmission
parts/ components.
Philippines recently promote their
capability to produce automotive
parts/component since they have highly
skilled labor.
Less Opportunity Most Opportunity

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Rethinking Your Localization Strategy
Key Focus Area of the ASEAN OEM’s Localization
Logistics
Purchasing R&D
Manufacturing
Factories extension Production, flexibility Adaptions,
technology,
innovation,
infrastructure
R&D organization
and human
resources
Delivery structure,
effective logistic system
Source of material
& origin, quality
KEY FOCUS AREA OF ASEAN OEM’s LOCALIZATION
EXTERNAL FACTORS INTERNAL FACTORS

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Rethinking Your Localization Strategy
ASEAN Localization Opportunity – 1
Future Vehicle & OEM’s ASEAN Localization
Opportunity
ASEAN countries’ demand for automotive is growing
due to the expansion of the OEM players:
Other country OEM manufacturing
and also others existing OEM
company are increasing their
production capacity with the
increasing demand of vehicle,
especially the low-mid class of
vehicle.
Thailand with its capability, resource
and skilled labor is still to be the hub
of ASEAN automotive industry.
Thailand capability in automotive
technology & development is the
most influence factor by the OEM’s to
built the factory there.

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Rethinking Your Localization Strategy
ASEAN Localization Opportunity – 2
Future Vehicle & OEM’s ASEAN Localization
Opportunity
ASEAN countries’ demand for automotive is growing
due to the expansion of the OEM players:
Malaysia push to increase their
localization parts/components to
boost their local OEM manufacture
Proton & Perodua.
Vietnam is increasing their capability
in producing localized parts/
components especially for 2-wheeler
OEM parts/components.
The increasing number of OEM’s
parts/components creates
opportunity to increase labor skill.
The Philippines is revitalize their
manufacturing facility and also
increasing their knowledge in
automotive technology development.

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Tel: (62) 5794 5800
Fax: (62) 5794 5808
Wisma 46, Kota BNI 25th Floor,
Unit #07-09
Jakarta 10220
id.info@spireresearch.com
www.spireresearch.com