Southeast Asia’s Biggest Car Manufacturer to Spend $64 Million on New R&D Center

By webadmin on 03:32 pm Jul 14, 2012
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ID/Damiana N. Simanjuntak

ID/Damiana N. Simanjuntak

Astra Daihatsu Motor, the biggest car manufacturer in Southeast Asia, has set aside Rp 600 billion ($64 million) to build a research and development center in Indonesia, its president director Sudirman Maman Rusdi said on Thursday.

Astra Daihatsu Motor serves the main global production base for Daihatsu, Japan’s oldest car manufacturer.

“The first phase of construction has begun, with an investment of Rp 150 billion,” said Sudirman, who is also the chairman of the Association of Indonesian Automotive Industries (Gaikindo).

Sudirman made the comments after a meeting with Industry Minister M.S. Hidayat in Jakarta on Thursday.

Phases 2 and 3 of construction will cost Rp 500 billion, Sudirman said, without elaborating.

Astra Daihatsu Motor is a joint venture between Japanese car maker Daihatsu Motor and Indonesia’s Astra International. Its most popular product is the Daihatsu Xenia, one of the nation’s best-selling cars.

The Rp 600 billion investment for the research center will not come out of the funds set aside to build a new assembly plant in Indonesia, Sudirman said.

Sudirman said earlier this year that Astra Daihatsu Motor planned to spend $233.3 million on the new plant to boost annual production capacity to 430,000 from 330,000. The new plant, which is expect to be finished in October, will be fully operational in 2013, he said.

Both the research center and the plant are located in Karawang, West Java.

Budi Darmadi, director of technology-based industry at the Industry Ministry, said Daihatsu’s investments showed its commitment to Indonesia. “It means Daihatsu intends to stay for the long term,” he added.

Total industry car sales rose to 534,876 units in the first six months compared to 417,672 in the first half of 2011. Astra Daihatsu Motor sold 101,639 cars in June, a record monthly high.

Astra International also sells other cars, including Toyotas, Peugeots and Isuzus.

In the first half, Astra International sold 301,636 cars in Indonesia, enough for a 56.35 percent market share.

Daihatsu contributed 26.62 percent of Astra International’s total car sales in the first half, ranking second behind Toyota, which had 202,519 units of car sales.

Indonesia’s growing middle class and cheap borrowing costs have boosted the domestic car industry. Indonesia seeks to overtake Thailand as the biggest car market in the region, and new sales records are frequently achieved.

However, the automotive industry expects new car financing regulations imposed last month to negatively impact sales growth this year.