Isuzu Astra Motor Indonesia (IAMI): Driving Innovation in ASEAN's Largest Automotive Market

Guest: Pak Yusak Kristan Soleman, President Director, Isuzu Astra Motor Indonesia

In this episode, Pak Yusak Kristan Soleman, President Director of Isuzu Astra Motor Indonesia, discusses the automotive sector's digital transformation journey in Indonesia and the opportunities for growth in the region. He shares insights into Isuzu Astra's approach to leveraging digital technologies to enhance customer experience, improve manufacturing processes, and drive innovation. 

Pak Yusak also highlights the challenges and potential of electric vehicles in the Indonesian market, as well as the importance of data analytics and AI in shaping the future of the automotive industry.

Isuzu Astra Motor Indonesia is a joint venture between Astra International and Isuzu Motors Limited, holding the Isuzu brand and manufacturing Isuzu vehicles, components, and accessories in Indonesia. The company plays a significant role in Indonesia's automotive sector and commercial vehicle production, which is poised for substantial growth in the coming years.

Isuzu Astra Motor Indonesia is a winner of the 2024 ASEAN (Indonesia) Enterprise Innovation Awards in the open category.

Transcript

0:02

The aibp ASEAN B to B growth podcast is a series of fireside chats with business leaders in Southeast Asia focused on growth in the region. Topics discussed include business strategy, sales and marketing, enterprise technology and innovation. You Valerie, hello and welcome to the aibp ASEAN B to B growth podcast, where we sit down with individuals responsible for driving growth of their businesses here in Southeast Asia. My name is Valerie, and today we have with us, but USA, Christian solemat, President, Director of Isuzu Astra motors Indonesia. Isuzu Astra motor Indonesia is a joint venture between Astra International, as far as Isuzu motors limited and is the agent holding the Isuzu brand and the manufacturer of Isuzu brand vehicles, components, accessories and spare parts in Indonesia. So Isuzu Astra moto Indonesia is a winner of the 2024 ASEAN enterprise innovation awards in Indonesia in the open category with their case study on digital transformation of Isuzu monozukuri. And today we'll be diving deeper into the innovation and growth story behind Isuzu Astra moto Indonesia. But yusak is currently president, Director of Isuzu Astra moto Indonesia, and I would like for him to actually introduce yourself and your background, maybe share with us a little bit about your current role and responsibilities at Isuzu Astra moto Indonesia. You so much, Valerie, good morning, and have a very good day today. And thank you so much for aibp as well, because this year is also Astro motor Indonesia, really honored to get the award from aibp. I'm sorry, uh, let me introduce myself first. My name is Yusa Christian, so I'm now joining isusu Astra motor Indonesia since last year, since 2023 and I'm the president, director of isusu Astro motor Indonesia, as explained by Valerie, that is motor in Asia. Is a joint venture company between Astra international and isusu motor, limited in Japan. The shareholding structure is 5050, so we have the partner here in isusu astromotor Indonesia, and we are part of Asa International, where ASA International is the big corporation in Indonesia, and one of the pillars is automotive sectors. So beside isusu International also have the two wheelers Honda motorcycles and also other brand of four wheelers, just like Toyota Daihatsu, and also hold the BMW sales operation, and also UD trucks, yeah, in our group in ASA International, and me myself. I joined Asra since 1994 and my previous company before in isuswasan motor in Asia. I spent my 20 years from 23 2003 to 23 2020 so 203 to 2023 20 years in asroto parts. So the first time I know about aibp is in my previous company. Yeah, in asroto parts. So auto parts itself is dealing with the components, components manufacturers supplying to OEM as well to aftermarket. And then, luckily, I study a lot of things in astrotoparts, about the automotive components for two wheelers and four wheelers. And also I start knowing about digitalization and and all of the things that relate with the newest technology in this astrotopath. That's why, at the time, I got the lucky moment to know IDP as well. Yeah, in astrotopars and now in isusu astromoto Indonesia, I'm dealing with business that from asotopath, with the components, dealing with components now dealing with the big units, because isusu Indonesia is dealing with the commercial vehicle, the pickup, medium pick up, light truck and medium trucks. So isusa motor Indonesia is the manufacturer of Isuzu in Indonesia and also the distributor. So both manufacturing side. And distribution side I'm now responsible for in Isuzu astronomy, and it's a really good opportunity for me to take up this challenge, because we can know very well about the technology trend from the manufacturing side and also from the market side, the distribution side, we see the needs of the market and the trend of the needs, what the customers need, and what is the business need, say in the logistics sectors, in the mining sectors, or in the general transport there are so many specific needs that we can identify in this now, in my position in isusu Astra motor Indonesia, and as a part of isusu Group globally, yeah, surely, we also aim to be the world class manufacturer and to be the best in the isusu group. Yeah. So thanks to aibp as well. So we are feel encouraged to take up a new initiative in the utilization. Yeah, as Valerie also mentioned about our presentation about isusu monosukuri, it's also take taken up from the isusu way to do the control and production control, and then we do the digitalization in that area. I think that's brief introduction from my side. Valerie, thank you very much. I think for you mentioned the Isuzu green Isuzu way. We'll dive a little bit into that later on. But before that, thank you for sharing the introduction for our regional, international audience as well. And fun fact at Park yusak mentioned he's known about ebp when he was in Astra auto parts. Astra auto parts was actually a winner of the ASEAN enterprise Innovation Award back in 2022 and I think with that, we are very happy to see park you saw here again, and here we have him on us for our podcast. So before we dive deeper into the innovation the technology involved, would like to for you to give us a brief overview of the automotive sector in Indonesia, as well as this position with globally, especially in the face of, I think, increasing adoption of electric vehicles. And how is Indonesia in a unique position or different from the rest of the world? Okay, so one of the unique point of Indonesian in automatic market is the very big population in motorcycles, in two wheelers, yeah, maybe in ASEAN countries, we are the biggest, yeah, we, we manufacture the biggest numbers of popular motorcycles. And also we have a very huge unit in operation of motorcycles. Even the density to the population, maybe almost, we can say in certain area, one people owning one motorcycles, they are almost like that. So it's very unique situation, I think, because in Indonesia, many peoples choose motorcycle as the best way to mobile because it's very practical and yeah, very fast, and then it's very affordable as well. And then it's very popular Indonesia. Well, if we talk about the four wheelers, the formulas, population, the density is not that high compared with other ASEAN countries. Maybe we are not the highest. And in that area we still see, we still see the opportunity that Indonesia have a very big potential to grow up in formulas market. And about the EV, yeah, the trend of electric vehicle. It's a very hot topics everywhere we have the discussion. Everybody just talk about TV, Ev and Ev. So if we see the penetration in Indonesia, it's not so aggressive, but in certain area in the big cities, maybe the penetration can can be higher because the infrastructure is already available, say the charging station and other infrastructures needed also the connectivity, because when they are doing the charger the charging, they have to connect with certain website, and then to do the payment, the registration and so on. So in the big city, seems the penetration can be faster and higher. But as we know that Indonesia is an archipelago. There are so many islands, and then if we go to the smaller city, and the more. Mode area. Maybe the penetration of EV will be quite challenging because the infrastructure is not yet available, yeah, even maybe the electricity is not so well, equally distributed. So there's some challenge, yeah, in, yeah, in infrastructure, and another side is also the customer behavior, because when having the electric vehicle, so the behavior is a bit different, say, in the fueling Yeah, when we use the internal combustion engine, we just go to the fuel station and then it take around, yeah, maximum five minutes to fuel up until the full time it's already finished. But charging station, if even though we can see the charging station, we can find the charging station near to our position, and then it will take at least one hour, yeah, with the ultra fast charging, so it will be the different behavior, and then it should be, yeah, educated and people should be familiar with this, a new behavior, because it should be more anticipated before going out from the home. Yeah, if they do the home charging, yeah, they have to be sure that it is full. The battery is already full, and then we have to calculate how long the distance we will go, and then is it enough for the battery, and so on and so on. And the other behavior, which is unique in Indonesia is when somebody will purchase the vehicle they have already thought about the resale value. So even before do the purchase, they have already think about, okay, what is the result value of the product I will purchase? Is it good enough or not enough? So they prefer to have the better result value, they will choose the brand that have the higher result value in EV now it's not yet proven, yeah, because nobody knows about the result value. And as we know that most of the component of the price is coming from the battery in EV in Bev, in the EV in Bev. So maybe it still take time for Indonesian market to have a high penetration on Bev battery electric vehicle. But going forward to that direction, we have the hybrid EV as well. In case of hybrid EV people is more convenient and more feel secure, because hybrid is still can be treated as the IC, yeah, so they can go to the fuel station and so on. So if we see the data the hybrid sales is also increasing. Yeah, we see the uptrending. So maybe it's a good way to educate the customers in Indonesia to know about EV, starting from hybrid EV and then the Bev, starting from the big cities, but from from the smaller cities here we have the challenge in the infrastructures as well as the customer behavior. That's a short picture about TV in Indonesia. Thank you very much for the short but very comprehensive picture. And the keyword you keep mentioning is customers. So at the end of the day, you tailor to what the customer needs or what the customer wants? Yeah, I think that brings us very nicely to our next question. Actually, at Isuzu Astra Moto, how are you leveraging digital technologies to enhance customer experience and then enhance manufacturing processes within the organization? Yeah, it's a very interesting journey for us. So let's start with the manufacturing side. Yeah, the manufacturing side. So the thing we do is the digitalization the main activities, yeah, on top of automation, surely, in the production process, we have some automation. But let's talk about digitalization more. Because the digitalization can bring us to something that actually is not the new thing. But when we do the digitalization, we can do many things in a more efficient way, more effective ways, and more productive ways. So it's not the new activity, but the current activities and then being digitalized, and it's come up with the very good result. That's why I said it's a very interesting journey. Yeah, so in some cases, in our factory, in the manufacturing side, after having the digitalization at. Activities, we can see the numbers of the improvement. Say, for the productivity increase, we can measure it very well. I think in the last presentation, I also shared it, and also about the claim rate. Say, when we do it manually, it's not being digitalized. There's the claim rate from the customer is higher, and after being digitalized, it can be declined, and it can be managed very well, and also the lost time injury, because safety is also one of our highest value safety in the manufacturing side and everywhere, actually in Isuzu. And it's also we come to the zero lost time injury, yeah, because the digitalization can help us to identify or to give the early warning and to see the progress in the morning meeting, we can see, okay, what happened, the latest update and what indicate something? It's really early warning for us if something wrong is happen, so we can anticipate and avoid any further damage. Yeah, and also overall, in overall, surely, financial aspect, yeah, it's the most important thing. After having these activities, we can see that the production cost is can be more efficient, the manufacturing costs can be lower, and surely it will give the positive impact to our financial bottom line. Well, for the customer experience. If we see the distributor side, we see the needs of the customers, and as the commercial vehicle, the customer purchase the vehicle, just like the production tools. Yeah, it's not for luxury. Is not for daily living, but it's really for making money for, ah, production. So the uptime is very important, and the downtime is really expensive for them. So our units, ah, if they face the problem, they need to have the fast solution coming from us. That's why we have to prepare multi windows for the customers to catch up and to find us, to reach us quickly so we see certain customers. Maybe they are all already familiar with the apps. So we have the apps my isusu ID is there, yeah. And some customers are only familiar with WhatsApp. Maybe WhatsApp is one of the most familiar applications now. So we also have the WhatsApp in a isusu call center, yeah. So at any time, they can text us, and then they can WhatsApp, call, voice call, and then we can reach them, and then make them really quickly serve, yeah, and then give the solution. And besides of that kind of things to ensure the availability of our spare parts, we also do some digitalization to manage the inventory level on or to notice the to identify the inventory level in our dealers, so that if the inventory level is already very low, we have The autofill menu, autofill feature, so automatically, without being ordered by the dealer, we can auto replenish the stock so to ensure the availability is there, I think that's some of the points that we are doing in the manufacturing and the customer or distribution side. Thank you. You mentioned earlier, there's a few different factors from the manufacturing side, so things like increasing productivity and then increasing bottom line numbers. Are there any specific metrics that you watch yourself when it comes to results from digital transformation? Any key ones that you might like to highlight? I know you mentioned some in the previous presentations for the awards, but maybe, is there a key number that you are looking at in terms of, say, productivity or even, like, cost savings that have arised from digital transformation? Sure. So the productivity increase, we measure it. So in last presentation, I think I share about the result of our activities in digitalization. And also another metrics is the financial aspect. Yeah, the financial aspect that the. We achieve last time we say that the company total profit is increasing the market share also increasing the labor productivity, maybe in percentage, we can say that the total manufacturing cost is reduced by 35.2% Yeah, from all of these activities, while our our market share is increasing 7.2% and company total profit is increasing by 9% that's the company financial or company parameter. But in the manufacturing side, we see that the labor productivity is increasing by 10.5% and the claim rate is reduced by 5.7% while the on time delivery is also increasing by 2.8% so I think it's the metrics we keep measuring to ensure that our digitalization activities is not the nice to have one, but we need to have it. It's not the accessories, yeah, because in many cases, digitalization or automation is just like the accessories. And then we can say, Oh, we have the digitalization, but no positive results. So in Isuzu, I'm ensuring, and I have my point to all of the teams that we have to ensure that our activities is really need to have, not nice to have, and that's why we keep measuring this from the safety, quality, cost and delivery, and also the total performance, just like the market share We enjoy, and then the profitability we get more well said, Thank you, and especially when it comes to have to technology that you need to have. Recently in Indonesia, in the past couple of months, there's a lot of talk around AI, and I think some of the things that you've mentioned earlier about say things about replenishment of inventory, looking at the inventory that our dealers have, this has a lot to do with things around data analytics and then the data that the different stores are providing you, how in terms of business objectives, When it comes to the application of data and AI. I think along the similar vein that you mentioned about technology should be more of a need to have for the organization. Are some of the key benefits that you know, you think should be achieved through things like newer technologies in terms of data and AI within the organization. So I think data and AI is something really needed, yeah, especially in the future. Maybe for AI, surely we have to provide enough data, not to short and not to short time, and then we jump up to AI, but from the historical data, we can record, and then the longer, the better, and then we can see the the pattern and the behavior, and I think it will come up to a very good information. And maybe we can, we can be, depend on, rely on this AI, but talking about machine learning, surely that we have to be persistently and consistently ensure that the data we are recording is a good data, is a valid data, because sometimes it's some abnormality happen. So if the AI, because it's the AI, they just rate it as the normal situation. So we have to manage it, the abnormality, and so on and so on. So in our group, we have certain department that managing this data, data analysis. We call it the data warehouse, yeah, so all of the data is there from the manufacturing side, from the distribution side, and then how to make it combined, and which one is will be useful for the next activities? I think data is so important. Yeah, definitely. I think we cannot forget that question nowadays when it comes to digitalization, especially when they talk about integrating, because earlier you mentioned manufacturing all the way to customers. So integrating our data systems across different functions, different departments is definitely something that every organization is looking at. And I think you mentioned at Isuzu, Australia, you have your data warehouse. I believe, is it at what stage of integration is the data, you know, is it end to end, or is it currently, you know, looking at more, say, manual input based on past historical data, and then adding on current data. Yeah, actually, it's not fully integrated yet, because integrating all of the data is one of the challenging. In things, yeah, I think it's so challenging because the data, yeah, some of the data if we have already more than 10 years data, but some of the data we only have the last two years and something like that. But what we are doing, we try to compile and integrate it. Some of them is still manually but yeah, we are going to the direction to make it all fully integrated by system? Yeah. Thank you very much. That brings me to my next question, actually, looking at the potential, you earlier mentioned that digitalization is the key, along with, I think, automation along the processes. But when it comes to manufacturing of automotives, where do you see most potential for technology to actually drive innovation in the automotive sector? So maybe the maybe a certain type of technology you're looking at, or certain technology that can improve a specific process that's top of mind for you? Yeah, I think AI will have a very good potential if we see the sectors we are dealing with, say in the logistics sectors. Yeah, some of customers of ISU is in the logistics sectors, and they are now have the needs of measuring or making a most productive ways of having the operation say for the routing. If they go in the daily operation, and then today, they will go in which points, and then which is the most efficient routing. And then on top of that, how to make the product the most productive ways of the driver and so on. So we have the telematics, the needs of telematics. Yeah, before, before going to the logistics, maybe in the unit itself, it's also us also need to provide some telematics to the customers, to measure the fuel efficiency, fuel consumption, maybe, or even to identify the driving behavior of the drivers, maybe in the off road, in the mining sectors, they also need to check to ensure the fit of the product. So when the driving behavior is identified a bit negative, so we can give the warning, and it can be early identified before something wrong happened. In the logistics sectors, they need that kind of telematics, and then they expanded to the needs to measure the time of trip, yeah, the trip time, and then the trip route, and also the total productivity. So I think it's really potential to combine this from unit, from the Isuzu, and also from the customer side, and then we can go with all with AI, right? Because AI, when they have the record of the customer behavior, and so on and so on, and the data analysis can be very well analyzed, and we can give a very good recommendation to them, and then, as the final result, they will have a less cost, I mean more productive in using Isuzu compared with other brand. Maybe that's our aim. That's our aim. But in overall process of the their business, they will see that from time to time, they have a better profitability because they can reduce the cost, just like we experience in our manufacturing, maybe they have the parameter, and then what is the cost per kilometers, say, or cost per trip, and they can have it lower and lower, and it can help us to have a more efficient logistic cost. Yeah. Thank you very much. And you mentioned there are different data sources that you get the information from, right from different customers, logistics sector, the individual vehicles themselves, with EVs in Indonesia. So for Isuzu Astra, those what is some of the strategies, or some of the direction that you're looking at, with regards to addressing this potential demand or potential market opportunity in Indonesia, yeah, so when we are talking about commercial vehicle now, commercial vehicle, as I said, that the most important thing is the uptime, and because they need it as the money maker, yeah, to make money. So when we have the hybrid or EV, actually, our partner isusu motor limited, in this case, has already developed both platform, yeah, hybrid platform and also EV. So hybrid EV and the. EV is already there. They also, I think, in the last exhibition, we also exhibit this EV, health EV, battery EV. But the concern is, if we see from the customer's point of view, say, if they are using battery EV here, and then they need to charging in between the trip, yeah, so when they they have the long trip one day, and then if it is more than 200 kilometers, they have to charge, because now the maximum distance, crossing distance is still around 200 kilometers. And then when charging, will take around one hours or even more. So the productivity can be lower. So in case of selling the unit Isuzu, now we can say, Yeah, we have the product. We can sell it if you want to, but the customer's point of view, what being our concern is they have a lower productivity with the Accessing infrastructure and behavior, yeah, because when we talk about commercial vehicle the trip is not fixed, the route, the trip route is not fixed. So today they go to the west direction, and then they have to go to other directions, and then we cannot sure that the infrastructure, in this case, is charging station, is available in everywhere they are moving. So it will be challenges for it will be so challenging for the transporter or for the user of our units, because it's not really fully available the infrastructure. And then another thing is about also the behavior. As I said, when they have the unit, commercial vehicle, they purchase it, they already calculate for the residual value, the final value. So the EV, the battery, Ev, nobody knows how much will be the residual values, yeah. So I think what we are doing now, so technology wise, we are having it so our partners is keep developing it, yeah, with the newest technology. Because, as you know, the Bev, also changing so much? Yeah, the battery also keep improving from time to time. In a very short period, it's already going higher quality now and then, maybe moving forward, since that is the current focus for the organization in the automotive sector. Moving forward, where do you see say Isuzu Astra even Indonesia's role evolving within the automotive industry, and you know, establishing yourself as a leader in the next five to 10 years. And where can Isuzu Astra contribute to this specific value proposition that the automotive sector in Indonesia can provide, yeah, if we talk about five to 10 years ahead, as I said before, in Indonesia, the density of the vehicle the four wheelers, in this case, not two wheelers. Yeah, the density compared with the number of population in Indonesia is still very low. So if we talk about the five to 10 years ahead, I think it's a very huge potential yet to increase the production volume of automotive in Indonesia, and specifically for isusu, in this case, for commercial vehicle. Surely we also have the same threat. So if the economic growth is growing very well, so not less than 5% a year, so it's always over 5% a year, and the GDP also positively growing, I'm sure that within the next decade we can enjoy a very big group, yeah, very significant group. And within ASEAN automotive, I think Indonesia can be counted to be the most competitive one. I think, yeah, because we have the big population, and we have a big a high productivity, especially if we implement more digitalization and so on, we experience it. So if the digitalization and all of the new things technology help us to increase the productivity, I'm sure that we can deliver a very good productivity in Indonesia, so that amnesia can be a very big base for production. Yeah, for automatic production. Thank you for sharing. We look forward to continued growth in the automotive sector, as well as with Isuzu Astra motors, contribution to that growth, as well as in. Indonesia. And I think before we end off, would Pak USA like to have or give us some final words of advice for some of the manufacturing or even the automotive sector out there who are listening in on this podcast with regards to digital transformation, innovation as well as growth for the organization? Okay, I think I encourage my team in isusu to keep innovating, to innovate anything. So if they have any ideas, even the smallest one, just raise it up in a smaller group, yeah, maybe in their working unit in the business unit, and then they can try to elaborate more. And I'm sure that from that kind of ideas, there's so many potential things when we join it, with the digitalization, with the automation, or with anything that help us now the technology base. So don't stop thinking about the innovation. Don't stop giving ideas about improvement, because the improvement now can be helped with the strong enabler, which is technology. Technology is being a strong enabler for any ideas we are having now with the new initiative that is which is impossible previously, last time when we don't have the technology, it seems so impossible and so far away, but now technology enable us to do it, and it's really possible to make it happen. Thank you very much. And with that, thank you so much for your time and for sharing with us so much insight into the Indonesian automotive sector, as well as the innovations that go on within the manufacturing all the way to the customer side and even with your partners in the commercial vehicle landscape with that just like to thank USA, and we look forward to hearing more from Isuzu Astra, as well as the brighter Astra team with regards to digitalization and innovation in the next few or upcoming years. Thank you. Thank you, Valerie, thank you so much. We hope you've enjoyed the episode. For more information about business growth in the ASEAN region, please visit our website, www dot IoT business, hyphen platform.com, you.