Strategic Role of Local Supply Chain Supports Export Performance of National Automotive Industry

ICE BSD, Tangerang – In the face of global economic challenges, the export performance of the domestic automotive industry has become one of the main sectors that can support a positive trade balance for Indonesia. The performance of national automotive exports, as high-tech products, is undoubtedly linked to the strategic role of the supply chain and local Small and Medium Enterprises (SMEs) that contribute to the production process, thereby enhancing the competitiveness of domestically produced automotive products on the global stage.

Today (Wednesday, October 9, 2024), PT Toyota Motor Manufacturing Indonesia (TMMIN), with the support of the supply chain and SMEs developing export products ranging from vehicles to components, received the Primaniyarta Award from the Indonesian Government through the Ministry of Trade. This is the 11th Primaniyarta Award, presented directly by President Joko Widodo, accompanied by Minister of Trade Zulkifli Hasan, to President Director of PT TMMIN, Nandi Julyanto, during the 39th Trade Expo Indonesia (TEI) 2024, themed “Build Strong Connection with The Best of Indonesia.”

“First of all, we would like to express our gratitude for the Primaniyarta Award we received from the Ministry of Trade. This appreciation is realized thanks to the support from all parties, especially the Government of Indonesia, which has provided various facilities, infrastructure, and regulations to assist Toyota Indonesia's export performance. Through this Primaniyarta Award, we will strive to enhance the export performance of domestically produced automotive products, thereby contributing to the country's foreign exchange and a positive trade balance for Indonesia,” said Nandi Julyanto, President Director of PT TMMIN.

Since 2008, PT TMMIN has participated in the TEI and has consistently sought to maintain and improve export performance, despite the uncertain global economic conditions. The year 2024 marks the 11th time PT TMMIN has received the Primaniyarta Award. This year, PT TMMIN successfully won the Primaniyarta Award in the category of "Prospective Market Exporter" due to having more than 5 years of export experience and, over the past 3 years, successfully penetrating and expanding into prospective markets, including Africa, Latin America, Australia, South Asia, and the Middle East.

“It has not been a short journey for PT TMMIN to maintain export performance for over 30 years. Since 1987, PT TMMIN has begun its export activities by shipping the third-generation Kijang model to Brunei Darussalam. We have continuously developed our role as a manufacturer and exporter of automotive products, including vehicles, components, production tools, and spare parts to more than 80 countries. This includes regions in Asia, the Middle East, South America, Australia, Africa, and Oceania, including non-traditional countries and prospective markets. The achievements of Toyota Indonesia would not have been possible without the contribution of the supply chain of business activities involving more than 1,000 companies, including local SMEs, which have absorbed over 345,000 workers from upstream to downstream,” said Bob Azam, Vice President Director of PT TMMIN.

The criteria for the Primaniyarta Award are based on the company’s ability to increase exports, diversify products and markets, and strategize to face challenges during crises and heightened competition. Additionally, compliance with credit, taxation, customs, labor, environmental maintenance, and social responsibility is also considered.

Developing the Contribution of Competitive SMEs

Toyota Indonesia continues to strive to develop the supply chain, including SMEs, to strengthen and enhance the competitiveness of Indonesia's automotive industry by making TMMIN an export hub for the supply chain and SMEs, supported by a strong supply chain base from tiers 1, 2, and 3. Toyota Indonesia has engaged more than 220 suppliers in tier 1 and 34 SMEs located in Jakarta, Bogor, Bandung, Tangerang, Bekasi, Cirebon, and Tegal. Furthermore, it ensures that the production quality of local SMEs meets global quality standards for all SMEs that contribute directly to the production of export vehicle components, including wire harnesses for the Veloz vehicle lighting production, rubber seals & foam protectors for side mirror production on the Yaris Cross, and console brackets for the Kijang Innova Zenix dashboard production.

Showcasing Converted Vehicles at TEI

At the 2024 TEI event, PT TMMIN showcased Toyota vehicles that can be converted in terms of utility and appearance, including the Kijang Innova Zenix Cash Carrier and Fortuner Ambulance. Additionally, the Kijang Innova Zenix HEV FFV (Flexible Fuel Vehicle) Concept Car was also presented. Flexible fuel vehicles can consume ethanol E85-E100. The combination of HEV and FFV technology contributes to emission reduction and decreased fuel imports, especially entering the energy transition era. Not only showcasing vehicle units, PT TMMIN also presented high-quality Original Equipment Manufacturer (OEM) components and accessories, as well as Dies/Jigs. The presence of these converted vehicles and FFV concept cars demonstrates Toyota Indonesia's capability and innovation as an automotive industry player in responding to global market needs and interests. This includes utility, environmentally friendly technology, and high competitiveness, thus expanding export potential.

“Through the TEI, PT TMMIN aims to expand the potential of export destination countries by exploring market opportunities and demands, especially in non-traditional export destination countries. This includes various vehicle conversion innovations such as cash carriers, well-cabs, patrol cars, as well as flexy fuel vehicles, along with accessories and other vehicle components tailored to global market needs. We hope that competitive and innovative products created by Indonesian human resources can be widely recognized and well-received in international markets, thereby enhancing export performance to support national economic growth,” said Nandi Julyanto.

Maintaining Toyota Indonesia’s Export Achievements

According to GAIKINDO data, from January to August 2024, exports of complete T-Brand vehicles produced by the nation recorded approximately 177,690 units, contributing 59% to the total national automotive industry exports, which reached 298,691 units. The Kijang Innova (ICE and HEV), Veloz, Fortuner, and Yaris Cross (ICE and HEV) are the flagship export products of PT TMMIN. Meanwhile, two of Toyota’s electrification vehicle line-ups, the Kijang Innova Zenix HEV and Yaris Cross HEV, successfully exported up to 10,988 units, contributing 6.2% to the total export performance of T-Brand. A total of 6,978 Kijang Innova Zenix HEV and 4,010 Yaris Cross HEV were well received by consumers in global markets across Asia, Latin America, the Middle East, and Africa.

“Maintaining the export performance of the national automotive vehicles remains a focus for TMMIN by enhancing the export performance of domestically produced automotive products. Through product development, market expansion, and increasing export volume to meet the increasingly competitive global demand, particularly through electrified vehicles. The positive achievements of these two vehicle variants show that the innovative technology of Toyota's locally produced electrified vehicles is well accepted in international markets. This potential can serve as a pillar to strengthen the position of the Indonesian automotive industry as a production and export base, thereby enhancing global competitiveness,” concluded Bob Azam.