BMW to boost production with US$11.7m investment

German-based auto maker BMW Group is committed to invest some Rp 100 billion (US$11.7 million) in Indonesia for the next two years to increase its production capacity and strengthen its sales and distribution network.

BMW Group vice president Graeme Grieve said on Tuesday that the investment would be used to modernize its assembly line at a plant in Sunter, North Jakarta, with new production facilities. The plant, owned by PT Astra International’s subsidiary, PT Gaya Motor, currently assembles the BMW 3 Series.

“This investment will help us increase our production capacity from four cars a day to eight cars per day,” he said during the announcement of the plan, with BMW aiming to produce 3,000 cars per year.

He added that BMW would recruit some 60 new production workers in addition to the existing 46 workers in the plant to meet the higher production rate.

Grieve said BMW would also assemble the 5 Series at the plant in addition to the 3 Series currently being assembled.

He said all the locally assembled cars would be for the domestic market, as demand for BMW cars had increased significantly in recent years thanks to the country’s dynamic economic growth.

BMW also introduced two other brands under its belt at the event, MINI and Rolls-Royce, as part of the celebration commemorating PT BMW Indonesia’s 10th anniversary.

PT BMW Indonesia president director Ramesh Divyanathan said part of the investment would be for MINI distribution.

“In the near future we will build stores for MINIs, including outside Jakarta,” he said without providing numbers or locations of the outlets.

BMW said in a statement that the MINI models would be introduced at the end of 2011 when its authorized dealership opens.

BMW also launched its 6 Series convertible model, first introduced at the North America International Auto Show in January.

BMW’s sold 1,240 cars in 2010, up by 37.62 percent from 2009’s 901 cars sold. Compared to 2008’s 720 cars, the 2009 sales increased by 25.14 percent. BMW sold 461 cars in the first four months of this year.

Grieve said Indonesia’s sales were still very low compared to the global sales of 1.5 million units.

“However, we consider Indonesia an important market. That’s why we put more focus on Indonesia besides our traditional market of BRIC [Brazil, Russia, India and China] and other growing markets such as Turkey,” he said.

Rolls-Royce Asia’s Pacific regional director Paul Harris said there were 2,711 Rolls-Royce sold world wide in 2010.