According to the United Nations Statistics Division, the value of vehicle exports Thailand to Indonesia has also increased quite rapidly in recent years (Table 4). Exports of the automobiles, especially automobiles of the 1000-3000 cc class, increased rapidly in 2003. Correspondingly, the exports of automobile parts also increased enormously at the same time. This phenomenon seems to show that the export platform strategy was chosen by the MNEs and the export base for Indonesia’s automobiles is Thailand.
Table 5 shows the change of unit price of auto-related products exported by Thailand and Indonesia in 1995 and 2003. For the automobiles, the unit price in Indonesia is so smaller than that in Thailand in 1995. It seems that the automobiles exported from each country is totally different products. However, the unit price in both countries became closer and Thailand has less unit price of automobiles than Indonesia in 2003. We can see the same trend for automobile and truck parts. If we read this trend of the unit price as change in marginal cost, with greater the difference in marginal costs between Thailand and Indonesia, the export platform strategy was chosen and the exports of auto-related products from Thailand to Indonesia rapidly grew. This evidence is coincident with Lemma 3.
Finally, did the AFTA give an incentive to the MNE to take export platform strategy in Thailand for Indonesia’s automobile market? A series of deregulation measures in the past few years has led to conspicuous changes in the business environment for the ASEAN automobile industry. The Asian Industrial Cooperative (AICO) scheme was implemented in 1996, minimizing tariff dissimilarities and offering qualified participating companies the immediate benefit of the CEPT (Common Effective Pre ...