T

oyota Motor Corporation (TMC), Japan’s largest automaker, will invest an additional Rp 1.3 trillion (US$143 million) in Indonesia to boost capacity amid growing domestic demand, an official says.

Johny Darmawan, the vice president of PT Toyota Motor Manufacturing Indonesia (TMMIN) — Toyota’s joint venture with local partner Astra International — said on Tuesday that the investment would boost local production capacity from 180,000 units to 230,000 units by mid-2013.

“With the investment, we can make another 50,000 units starting from mid-2013, when the capacity upgrade is completed,” he told The Jakarta Post over the telephone, adding the upgraded plant would produce new models.

TMC president director Akio Toyoda previously announced plans to invest Rp 5.5 trillion locally, including Rp 2.9 trillion to boost TMMIN’s capacity from 110,000 to 180,000 units by building a new plant.

The plant is now under construction and set to start operating by the end of 2012.

TMMIN currently operates three factories in Indonesia: Sunter 1 and Sunter 2 in North Jakarta and the Karawang factory in West Java. Toyota Astra Motor (TAM), which handles distribution and after-sale service for TMMIN products, operates 210 outlets across the country.

Johnny, also president director of Toyota Astra Motor (TAM), said the increased investment showed that Toyota wanted to seize the opportunity as the Indonesian market continued to expand.

“At present, Toyota cannot fulfill the whole demand for cars in Indonesia. We still face shortages of supply, although Daihatsu has helped us,” he said.

PT Astra Daihatsu Motor (ADM) produces, among other cars, the Avanza multi-purpose vehicle and the Rush SUV for Toyota.

Indonesia, with a growing middle class and a population of 240 million, is a lucrative market for car sellers.

Its economy has grown by more than 6 percent a year for the past two years, while an improved investment environment has encouraged several automakers to boost investment in Southeast Asia’s largest economy.

Big automakers in Indonesia are waiting for a new government regulation on low cost and green
cars, which they predict will increase demand and improve the investment climate through various incentives.

Several automakers last year announced commitments to increase investments in the country, including Japan’s Daihatsu Motor Company Ltd., Suzuki Motor Corp. and Nissan Motor Company; Germany’s BMW and China’s Geely Automobile Holdings Ltd.

The Indonesian Automotive Industry Association (Gaikindo) said auto sales might only grow from 3 to 5 percent this year from 894,180 units sold in 2011 due to escalating risks from the global economic slowdown and planned subsidized fuel restrictions in April. TAM sold 311,136 cars last year, 34.8 percent of the country’s total auto sales.