Japanese Auto Giants Invest Big in Indonesian Production Plants

Damiana N. Simanjuntak

Japanese carmakers including Suzuki Indomobil Motor and Toyota Motor Manufacturing Indonesia have embarked on massive expansion plans in Indonesia.

The two manufacturers and five other companies have invested a total combined $2.4 billion to boost production capacity in the country, an Industry Ministry official said on Tuesday.

Suprijanto, the ministry’s director general of transportation and high technology industry, said car production would increase to 1.5 million units after these companies finished their projects. Currently, production stands at 900,000 units.

“Indonesia is still the prima donna for global automotive investors, due to its huge market and stable economy,” Suprijanto said. “There are some concerns about infrastructure, but they look at long-term potential. Moreover, their current capacity is already full, so they need to expand.”

Suzuki Indomobil Motor, a joint venture of Suzuki Motor and Indomobil Sukses Internasional, is set to spend $782.6 million to double its car production capacity to 200,000 units a year, ministry data showed.

Toyota Motor Manufacturing Indonesia, a subsidiary of Toyota Motor, is building two manufacturing plants at a combined cost of $534.4 million to double its car production capacity to 240,000 units.

Nissan Motor plans to invest $400 million through its Indonesian subsidiary to boost production to 2500,000 units from 150,000 currently.

Honda Motor is also building a $329 million automotive plant that would triple its capacity to 180,000 cars a year. The plant is expected to start operating in 2014 and create 2,000 to 5,000 new jobs.

Astra Daihatsu Motor, a joint venture of Daihatsu Motor and Astra International, is spending $233.3 million to boost capacity to 430,000 cars from 330,000 currently.

“The plant is expected to be finished in October and will operate at full capacity in 2013,” said Sudirman M. Rusdi, Astra Daihatsu’s president director.

Isuzu Astra Motor Indonesia, a joint venture of Isuzu Motors and Astra International, is investing $111.1 million to boost its capacity by 45,000 cars. The company expects the expansion to finish in 2014.

Krama Yudha Tiga Berlian Motors, a subsidiary of Mitsubishi Motors, is investing $27.8 million to increase its production capacity to 162,000 cars a year from 150,000 cars currently.

Investor Daily