ASEAN: Regional Trends in Economic Integration, Export ... - USITC

assembly. 102 This just-in-time delivery system often requires suppliers to locate near the
automaker, thereby reducing logistics costs. 103
In most cases, logistics issues were not cited as particularly burdensome or difficult,
despite lingering infrastructure issues throughout the region. According to one
automotive association, ASEAN countries recognize that regional infrastructure must be
improved, but infrastructure priorities must be identified (e.g., rail, road) and then must
be financed, both of which present problems. 104
E-Commerce
It is less clear how far along the use of e-commerce is in the auto parts sector in the
ASEAN region and its impact on competitiveness and integration. Although e-commerce
has reportedly been introduced by nearly every ASEAN country as they build out
infrastructure, the ASEAN countries operate at different levels of sophistication. 105 Many
local suppliers are believed to have Web sites that advertise their products and provide
basic company information, but business-to-business e-commerce may not be broadly
used. 106 Multinational companies located in the region, however, generally employ e-
commerce in their business operations. Several sources noted that, although e-commerce
has its place, the conventional approach of personal meetings with potential parts
purchasers and suppliers continues to be an important business tool.
A leading global automaker provided an example of its use of e-commerce in Vietnam. It
employs only a basic form of electronic supply chain management, and this system is
mostly used with suppliers located outside the country. The firm can place orders
electronically, but payment/invoicing rules require them to use a hard copy. For example,
for its dealerships in Vietnam, local rules require that a record of each individual
transaction be provided, whereas in every other country where it operates, the company
supplies a single monthly settlement with its dealers. However, the government is
becoming friendlier to e-commerce. Vietnam has initiated Project 30, the governmentwide
effort to eliminate 30 percent of the administrative burden in transactions with the
government, acknowledging that a paper-based system is not in line with globally
competitive procedures. 107
102 Industry official, interview by USITC staff, Kuala Lumpur, March 12, 2010.
103 Industry official, interview by USITC staff, Bangkok, March 17, 2010.
104 Industry official, interview by USITC staff, Singapore, March 9, 2010.
105 Industry official, interview by USITC staff, Kuala Lumpur, March 12, 2010.
106 Industry consultant, interview by USITC staff, Bangkok, March 17, 2010.
107 Industry official, interview by USITC staff, Hanoi, March 8, 2010.
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