Indonesia-South Korea Cooperation To Develop Electric Vehicle Industry

PIKKO and the South Korean government are developing the electric vehicle industry. Photo: Doc. Public Relations Kemenkop UKM

JAKARTA - Indonesia through the Indonesian Automotive Small and Medium Industry Association (PIKKO) agreed to cooperate with the South Korean Government, represented by the Busan Province or the Busan Economic Promotion Agency (BEPA) to research and develop the electric vehicle industry.

"I hope that BEPA's commitment to become a non-profit government organization under the auspices of the Busan Provincial Government, as part of the commercial under the auspices of the Korean Embassy, can contribute significantly, especially in supporting the electric vehicle industry in the country," said Minister of Cooperatives and SMEs (Menkop UKM) Teten Masduki in a written statement received by VOI, Wednesday, October 11.

Menteri Teten yang menghadiri acara Business Forum II Provinsi Busan/Korea Selatan dan Penandatan MoU tentang RnD Center EV antara PIKKO dengan BEPA tersebut mengatakan, Pemerintah Korea adalah mitra strategis bagi Kementerian Koperasi dan UKM (Kemenkop UKM) dalam pengembangan UKM di bidang industri otomotif.

"Our cooperation, both bilaterally and multilaterally at the national and regional levels of ASEAN, has resulted in various SME development programs, one of which is through this BEPA program," he said.

Teten assessed that South Korea is a country that is progressing rapidly in technological developments. Thus, he believes that the collaboration that is established is a motivation for Indonesia to be able to learn from South Korea, grow together, and go global.

Indonesia has gradually entered the automotive industry, especially electric cars. According to Teten, there are two policies in the development of the national industry. First, downstreaming of natural resources, namely Indonesia will no longer export raw materials including aluminum, nickel, and others.

Second, said Teten, regarding the substitution of imports of government spending. The Omnibus Law (UU) states that as much as 40 percent of the ministry/institutional expenditure budget is intended for MSMEs, which must contain local products with a content of 40-100 percent.

"In the future, it will also gradually replace fossil raw materials into electric cars. Indonesia can no longer buy cars outside Indonesia, but it must be made in Indonesia. We want cooperation with South Korea to move forward together to go global," he said.

The development of the national automotive industry continues to increase significantly. In 2022, the automotive industry will grow by 18 percent from the previous year. Indonesia itself has 4.4 million business units, the majority of which or 99.7 percent are the industrial sector.

One of them is the automotive industry which is one of the important pillars of the Indonesian manufacturing sector. In addition to supporting economic growth, automotive also provides jobs for 1.3 million people, even automotive sectors are attracting foreign investors.