REPUBLIKA.CO.ID, JAKARTA -- Indonesia and Malaysia has signed a memorandum of agreement (MoA) to develop automotive industries in both countries. President of the Indonesian Automotive Institute (IOI) I Made Dana Tangkas said that the two countries wanted to redirect it toward the development of ASEAN cars.

Indonesia and Malaysia were allied nations and have several automotive industries. Some 40 percent of the components of the ASEAN cars would be sourced from ASEAN member countries.

"We have ASEAN content, with components produced by each member country. After 100 percent completion, that is what we call ASEAN cars," Made elaborated here on Friday.

Regarding the plan, he noted that Indonesian and Malaysian industries had established a joint venture to develop the automotive component industry to meet the demand in both countries.

The joint venture will also improve research and development to create automotive products that are in demand in the ASEAN market. Made remarked that three Indonesian component firms are ready to establish joint ventures with Malaysian industries.Two of them are members of PIKKO (the Association of Small and Medium Industry on Automotive Component)," he revealed.

According to Chief Executive Officer of the Malaysia Automotive Institute Madani Sahari stated that both countries have the potential in the component industry. "If we can collaborate with them, it could meet 90 percent of the automotive component demand in the ASEAN," Madani remarked.

The MoA was signed by Made and Madani. The signing was witnessed by Director General of Metal, Machinery, Transportation, and Electronics Industries at the Ministry of Industry I Gusti Putu Suryawirawan and Malaysian Minister of International Trade and Industry Darell Leiking. The development programs in the agreement include improving the capacity of human resources in the automotive sector and developing small and medium industries as well as automotive technology.

Meanwhile, Suryawirawan said the ASEAN population, reaching 650 million, is a huge market potential. "We laud the efforts of MAI and IOI to jointly develop the automotive industry in the ASEAN," he remarked.

According to Suryawirawan, ASEAN, with a population of 600 million, is a potential market for the automotive industry sectors. He expressed hope that the MoA would develop a joint research and development center for the benefit of automotive industries in the ASEAN.

"Hence, it is expected that there will be joint products. Several types of cars can be developed," he noted.

Meanwhile, Minister Leiking said Indonesia and Malaysia need to work together in various fields, including the automotive industry.

"Malaysia and Indonesia must not divide in any way. We should remain united in the fields of economy, social, and development. Hence, I deliberately took time off to attend this signing to strengthen economic cooperation between the two countries," he added.

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