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Daihatsu, Suzuki name Indonesia production base

Indonesia’s improving investment climate and high rate of automobile sales have made two major Japanese car makers, Daihatsu and Suzuki, name the country their production base for the global and regional markets

Rangga D. Fadillah (The Jakarta Post)
Jakarta
Wed, May 4, 2011

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Daihatsu, Suzuki name Indonesia production base

I

ndonesia’s improving investment climate and high rate of automobile sales have made two major Japanese car makers, Daihatsu and Suzuki, name the country their production base for the global and regional markets.

Industry Minister MS Hidayat announced on Tuesday that Daihatsu would hold a ground-breaking ceremony on May 20 to mark the beginning of the construction of its new production facility in Karawang, West Java.

“The investment value for the factory is Rp 2.1 trillion [US$245 million],” he said at his office in Jakarta as quoted by detikfinance.com.

Astra Daihatsu Motor president director Sudirman Maman Rusdi confirmed the minister’s announcement on Tuesday, saying that the  Rp 2.1 trillion investment was just the money his company set aside for building and equipment.

Sudirman revealed the expansion plan on Feb. 23.

“The investment doesn’t include the funds we spent buying the land for the new production facility.

The facility is projected to begin operating in November next year,” he told The Jakarta Post over the phone.

He revealed that the factory would have a production capacity of 100,000 cars per year. Currently, Daihatsu already has a production facility in Sunter, North Jakarta, with a total capacity of 330,000 cars per year, so the new factory will boost its production to 430,000 cars per year starting in 2013.

“Fifteen percent of the cars produced in Indonesia will be exported. We export our cars to many countries such as Brunei, Japan, Mexico, the Philippines, South Africa and Thailand,” Sudirman said.

Seeing the enthusiasm in the domestic market for purchasing cars, Daihatsu has targeted to sell 120,000 cars this year in Indonesia, with the Xenia, Grandmax and Terios models expected to become the largest contributor to sales, he said.

In addition to Daihatsu, Hidayat said Suzuki would also make Indonesia its production base. The company had set aside $800 million to expand its current production capacity in Indonesia, he added.

Suzuki currently has a production facility in Tambun, West Java, with a total production capacity of 110,000 cars per year.

On April 25, an Indonesian official said Chinese heavy equipment maker, Sany Heavy Industry Co., had expressed interest in building a heavy equipment plant in Cikarang, West Java, with a total investment of up to $200 million.

Indonesia’s total car sales rebounded by 57 percent to 764,710 units in 2010 as the local market successfully recovered from the market slump in 2009 during which sales fell 20 percent to 486,061 units from 607,805 units in 2008.

The Indonesian Automotive Industry Association (Gaikindo) predicted earlier that 2011 car sales might peak at between 780,000 and 830,000 cars.

Sudirman acknowledged that the earthquake and tsunami that recently hit Japan had caused several disturbances in the supply of materials for automobile manufacturing in the country. The situation was expected to return to normal in a month or two.

In the first quarter this year, car sales rose 30 percent to 225,061 units from 174,074 units in the same period last year, Gaikindo data says. Toyota posted the highest sales with 85,426 cars, followed by Mitsubishi with 34,227 cars and Daihatsu with 24,169 cars.

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