Toyota Motor Corp. (TMC) plans to relocate the production base for its Fortuner sports utility vehicle from Thailand to Indonesia starting August due to the political instability in Bangkok and Indonesia’s growing economy.
Johnny Darmawan, president director of PT Toyota Astra Motor, told The Jakarta Post that its principal partner, TMC, would not make any new investment for the relocation.
“We will maximize the production capacity of our plant in Karawang from 60,000 units annually to its fullest [100,000 units],” he said, adding that the company would have to recruit more workers to achieve the target.
The production base in Indonesia will supply the Southeast Asia and the Middle East markets.
The production base for the Fortuner for the two markets was initially set up in Indonesia. Toyota relocated it to Thailand in September 2002 after considering marketing and efficiency factors.
Last month, one of four Toyota plants in Samrong in Thailand, which produced Fortuner, was closed due to a significant decrease of the company’s car exports from Thailand as an impact of the global economic crisis in 2008.
Each year, the Samrong plant used to produce an average of 60,000 cars annually, supplying markets in Europe and Asia Pacific.
The political turmoil in Thailand, which escalated last month, saw street clashes, grenade attacks and sniper fire, resulted in 89 people being killed and some 1,800 wounded over 10 weeks of protests in the capital. The crisis also cost the economy billions of dollars.
Thousands of “red shirt” protesters had been calling for Thai Prime Minister Abhisit Vejjajiva to dissolve parliament immediately and call new elections, saying his government came to power illegitimately and represented a Bangkok elite indifferent to the plight of the rural and urban poor.
The prime minister has yet to set a date for elections, saying stability has to be restored before they can be held.
Apart from Indonesia’s political stability and growing economy, Johnny said one of the key reasons for the relocation was due to increased sales of Fortuner units in the country.
A previous report said Fortuner sales from January to March increased by 61.2 percent to 2,536 units and managed to control approximately 24.7 percent of the SUV market in the country.
Toyota sold 66,307 cars in Indonesia in the first quarter of this year, up by 62.4 percent from 40,820 in the same period last year. Toyota targets 216,000 units to be sold this year, while the target for the country’s domestic car sales are 600,000 units.
Johnny said the trend of low interest rates and the delay in the implementation of taxes on luxury goods, also known as PPnbm, would help boost car sales growth in the country.
Toyota has recalled more than 8 million vehicles worldwide, including in Indonesia, for safety defects affecting some of its best-selling models. The US Transportation Department is reviewing thousands of
Toyota documents and could issue new penalties for the company’s handling of other safety recalls.
The recalls have prompted the first major review of US auto safety laws in Congress since tire recalls by Bridgestone/Firestone Inc. in 2000. (rch)