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Toyota to invest more in exports to turn RI into '€˜Asia'€™s Detroit'€™

Japanese car maker PT Toyota Astra Motor (TAM) says it will focus more on increasing exports in what it says is part of its plan to turn Indonesia into Asia’s automobile construction hub

Tama Salim (The Jakarta Post)
Jakarta
Tue, September 23, 2014

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Toyota to invest more in exports to turn RI into '€˜Asia'€™s Detroit'€™

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apanese car maker PT Toyota Astra Motor (TAM) says it will focus more on increasing exports in what it says is part of its plan to turn Indonesia into Asia'€™s automobile construction hub.

TAM president director Hiroyuki Fukui said Toyota had taken decisive measures to boost its production in Indonesia, citing doubled capacity for its second plant in Karawang, West Java, this year and an engine plant due to operate by the end of next year.

Further, the company has also added its export destinations, including the Middle East, Kazakhstan and the Philippines.

'€œWe have around 70 [export] destinations and our exports '€” combined with that of Daihatsu'€™s '€” comprise more than 80 percent of total Indonesian [automotive] exports,'€ Fukui told The Jakarta Post on the sidelines of the Indonesia International Motor Show (IIMS) in Central Jakarta last week.

'€œIf we can contribute more, Indonesia [will become] Asia'€™s Detroit,'€ he said.

Toyota'€™s producing arm, Toyota Motor Manufacturing Indonesia (TMMIN), exported 67,757 complete build-up (CBU) units in the first half of this year, up 10.7 percent from the same period in 2013.

The company also exported more than 20,800 complete knock-down (CKD) units, more than 30.6 million components, 25,000 engines and 48,000 cylinder heads, also in the first half of this year.

Altogether, Toyota has exported a total of US$870.2 million worth of vehicles and components in the first half of 2014.

It has targeted to increase this year'€™s and next year'€™s exports by 30 percent on an annual basis.

Fukui said the company would need more second- and third-tier suppliers to be more competitive in pricing to meet its long-term target of making Indonesia its production hub.

Toyota, through TMMIN, currently runs four plants in Indonesia with an overall production capacity of 250,000 vehicles each year.

To push down costs, Toyota is building an engine plant with a production capacity of 216,000 units per year in February.

The plant is scheduled for completion at the end of 2015.

Fukui claimed that Toyota controlled more than 34 percent of the local market, and along with Daihatsu'€™s 14 percent and truck consignments from Hino, the Toyota Group controlled around 50 percent of the domestic market.

According to Association of Indonesian Automotive Manufacturers (Gaikindo) secretary general Noegardjito, Toyota'€™s stranglehold on the Indonesian automotive market is due to the company'€™s strength in providing sales, services and spare parts.

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