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A Comparative Study on Export Competitiveness of Korea-Japan Automobiles to Indonesia

  • Journal of Asia-Pacific Studies
  • Abbr : JAPS
  • 2021, 28(3), pp.53-83
  • DOI : 10.18107/japs.2021.28.3.002
  • Publisher : Institute of Global Affairs
  • Research Area : Social Science > Social Science in general
  • Received : August 16, 2021
  • Accepted : September 17, 2021
  • Published : September 30, 2021

Tae Heon Kim 1

1조선대학교

Accredited

ABSTRACT

This study aims to examine the problems for enhancing the export competitiveness of the Korean automobile industry in the era of CEPA in Indonesia by comparing and analyzing the export competitiveness of the Korean and Japanese automobile industries in Indonesia. In this study, we analyzed the Revealed Comparative Advantage Index (RCA), Comparative Advantage by Country (CAC), and Export Similarity Index (ESI). The analysis results showed that Korea is in a comparative heat state compared to Japan in the main export items such as passenger cars (8703), freight cars (8704), automobile chassis (8706), automobile parts/arrangements (8708), and motorcycles (8711). Japan has a comparative advantage in finished car sector of automobiles, vans, freight cars and motorcycles, as well as in the parts/equipment sectors that support the assembly production of overseas production bases. In particular, Korea has generally inferior competitiveness of most items in the Indonesian market, but in contrast, Japan has far superior competitiveness in the Indonesian market than the global market in most items. Meanwhile, the group with the most intense export competition in the Indonesian market in 2019 was the Japan-India group for HS87 items, and the German-Japanese group for HS8703 items. In the Indonesian automobile market, the so-called “four-party competition” has been formed between Japan, the UK, India and Germany, while relatively low competition between Korea and Japan has been formed. Therefore, the Korean automobile industry should enhance the competitiveness of exports to Indonesia with the entry into force of Korea-Indonesia CEPA, and learn thoroughly about the past experience of Hyundai Motor's failure to advance into Indonesia and the success factors of Japanese automobiles in Indonesia, and actively seek ways to advance into the local market, such as establishing a joint venture for local production of eco-friendly electric vehicles and developing a local specialization model.

Citation status

* References for papers published after 2022 are currently being built.