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ajor Japanese car producer Suzuki Motor Corp. officially inaugurated on Friday the operation of the company'€™s fourth Indonesian plant in Cikarang, Bekasi, West Java, as part of its long-term commitment to making Indonesia one of its main global production hubs.

Built by its Indonesian unit Suzuki Indomobil Motor (SIM), with an investment of up to US$1 billion, the new plant comprises engine and transmission production facilities and a final assembly line.

SIM president director Shuji Oishi said that the new plant, the largest of its four plants in Indonesia, would enable the company to meet surging demand not only from the domestic market but also from overseas customers.

'€œSuzuki today proves its investment commitment in Indonesia. In this factory, we will meet domestic and export automotive demand,'€ he said following the inauguration ceremony at the plant, which was also attended by Trade Minister Rahmat Gobel.

Oishi said that the new factory, which has the capacity to produce 106,000 cars a year, currently produced Suzuki Ertiga multipurpose vans both for the domestic market and for export markets such as Thailand and Brunei.

The plant also produces car engines for the Ertiga and Wagon R vans as well as transmissions.

'€œHowever, in the future, it will produce several new types of car,'€ Oishi said, adding that at present, the new factory only produced about 50,000 units of the Ertiga model per year

SIM has three other plants, two in Tambun, Bekasi, which produce cars and motorcycles and another one in Cakung, East Jakarta, which also produces cars.

From these plants, last year Suzuki exported 25,000 cars to several countries in ASEAN such as Thailand and Vietnam, and to Latin American countries, including Peru, Chile, and Guatemala, Oishi said, adding that with the operation of the new plant the company expected to increase its exports to 30,000 cars this year.

Last year, through sales arm Suzuki Indomobil Sales, SIM sold 160,490 units locally, making Suzuki the third-largest automotive distributor in the country.

Suzuki and other Indonesian automakers saw their sales slump by 14.05 percent to 282,345 units during January to April.

Automotive Manufacturers Association (Gaikindo) chairman, Sudirman Maman Rusdi, has attributed the fall to the country'€™s economic slowdown, which has weakened people'€™s purchasing power. Total car sales in the country dropped by almost 2 percent to 1.20 million cars in 2014 from 1.22 million units in 2013. Gaikindo expected that this year'€™s sales would further drop to 1.1 million cars this year due to the unfavorable economic condition.

Indonesia, with its large population, has become an important investment destination for the world'€™s major car manufacturers. In addition to Suzuki and Toyota, many other car producers have built assembly facilities in the country.

Recently, Isuzu Astra Motor Indonesia (IAMI) opened the company'€™s new commercial vehicle assembly plant in the Karawang industrial area in West Java, to tap into rising domestic and local demand.

With the operation of the new plant, Indonesia has become Isuzu'€™s third global production hub after Japan and Thailand, IAMI'€™s president director Yohannes Nangoi said following the inauguration of the new plant.

He said the new plant, which has an annual production capacity of 52,000 units of commercial trucks a year, comprising 42,000 units of Isuzu Elf light trucks and 7,000 units of Isuzu Giga mid-sized trucks, replaced the operation of the company'€™s first truck assembly plant in Pondok Ungu, East Jakarta. (agn)