Japanese-based electronics and electrical equipment manufacturer Mitsubishi Electric officially announced Thursday the establishment of its Indonesian subsidiary, part of its strategy to support its growing market share in the country.

Mitsubishi Electric Indonesia (MEIN), the new subsidiary, would invest up to Rp 60 billion (US$5.18 million) to meet the Japanese company'€™s target of achieving Rp 1 trillion in annual sales in next few years, MEIN president director Takeshi Terada said.

He said the Indonesian subsidiary was set up in Jakarta late last month and would be an official
distribution company of the group.

Through MEIN, Mitsubishi Electric '€” which is part of Japanese giant multinational company Mitsubishi Group '€” will work on the national consumer electronics'€™ market, from air conditioning systems, home appliance products to factory automation products and systems.

The Rp 60 billion investment, Terada said, would be allocated to build Mitsubishi'€™s electric brand awareness in the country, starting by enhancing its main Jakarta office '€” before opening branches in other big cities such as Medan in North Sumatra and Surabaya in East Java.

'€œUntil Mitsubishi Electric Indonesia was established, we have been selling through our distributors. By setting up our own sales office, we'€™re planning to expand our business,'€ he said, explaining the company has been selling home appliances such as air conditioners and refrigerators in Indonesia since 1981.

Mitsubishi Electric, according to Terada, is aiming to expand its overseas sales ratio to 40 percent and achieve ¥23 billion ($230.14 million) sales in the 2015 financial year. The current oversea sales ratio is 34 percent, while its sales up to the first half of this year stood at ¥10 billion.

Terada said the subsidiary expected to reap Rp 1 trillion in sales in a few years and increase the company'€™s market shares in Indonesia by three or five fold.

He cited the market share for Mitsubishi Electric'€™s air conditioner products in Indonesia was about 5 percent, while its power line communication contributed 3 percent to the country'€™s total market for the product.

Air conditioning will be on the front line in increasing overall sales of Mitsubishi products in Indonesia, with the growing Indonesian middle class that has boosted its housing and office facility needs.

Indonesia, according to Terada, is seen as a promising market and is projected to be Mitsubishi'€™s top market in the region, with the high consumption rate of the Indonesian middle class expected to bring positive impacts on other electronic products produced by Mitsubishi.

When asked about the possibility of opening an assembling facility in Indonesia, Terada said Mitsubishi Electric had no such plan in the near future, saying its global production bases in Japan and Thailand were still adequate to meet demand.

He added that productive capacity reinforcement would be considered '€œif the market expands and the local content increases'€.

'€œIndonesia is a growing country with big potential. Even though we may have some unstable situations, we believe the Indonesian market will continue to grow,'€ Terada explained.

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