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utomakers are asking the government to drop duties imposed on steel products widely used in car manufacturing to help locally made vehicles become more competitive.

Most car producers in the country still require imported steel products such as hot-rolled coil and cold-rolled coil.

The government imposes antidumping measures on imported steel products to protect local producers, but the Association of Indonesian Automotive Manufacturers (Gaikindo) is demanding exemptions for steel products used in car manufacturing, insisting the supply from local steel makers is not sufficient.

'€œMany car manufacturers import certain steel products from China, Japan and South Korea to keep their production costs low,'€ Gaikindo chairman Jongkie Sugiarto said recently.

However, with production costs forced up by the antidumping measures, Indonesia-made cars might lose their competitiveness against Southeast Asian peers Malaysia and Thailand, he said.

Finance Minister Regulation No. 224/2014 on antidumping measures on imported cold-rolled coil from Japan, South Korea, Taiwan, China and Vietnam has been implemented since the end of 2014.

The regulation stipulates a range of import duties on steel products made by certain producers in the listed countries.

Cold-rolled coil produced by Chinese Wuhan Iron & Steel Company Ltd. and Qinhuangdao Tongye Cold Rolled Strip Steel Co. Ltd., for example, is subject to 13.6 percent and 43.5 percent import duties, respectively.

Jongkie said his association had discussed the matter with President Joko '€œJokowi'€ Widodo and that there had been a follow-up from both the Trade Ministry and the Finance Ministry.

Trade Ministry anti-dumping committee (KADI) chief Ernawati said on Monday that her committee was still investigating whether the measure lasting until March this year '€” would be revoked.

'€œWe'€™re still investigating alleged ongoing dumping practices on cold-rolled coil from Japan, China, Korea, Taiwan and Vietnam, and the final decision is expected to be made in the first quarter of this year,'€ she said.

Ernawati said the decision to revoke or maintain the measure would depend on the findings.

Meanwhile, Indonesian Iron and Steel Industry Association (IISIA) executive director Hidayat Triseputro said many of the association'€™s members had noticed a significant drop in demand from local automakers following the implementation of free-trade agreements with a number of steel-producing countries.

His association, he said, expected the government to retain the antidumping measures on a number of steel products, as a lot of imported steel products were sold below fair market price. Any revision to the policy should be based on findings from the investigation, he said.

'€œI think what the government needs to do is to optimize local production for both hot-rolled coil and cold-rolled coil, as well as encouraging automakers to use local products,'€ Hidayat added.

Demand for steel products from the national auto industry is estimated at around 1 million tons a year, with hot-rolled coil and cold-rolled coil making up 50 percent of demand each.