Suzuki eyes RI as production hub with $800 million project
Oleh Edy Can - Rabu, 22 Juni 2011 | 10:00 WIB
JAKARTA. Japanese automobile and motorcycle manufacturer Suzuki said it would spend up to US$800 million over the next few years to strengthen its business in Indonesia, which would become its regional production base.
Industry Minister MS Hidayat said Tuesday that the firm would set up a new plant in West Java and increase the production capacity of its existing plants in Tambun, Bekasi, West Java as part of the expansion plan.
“Suzuki Motor chairman Osamu Suzuki will come here on July 4 to announce the $800 million investment and declare Indonesia its production base for exports,” he said.
Hidayat added that the new investments would enable the plant to double the firm’s annual production capacity of cars as well as motorcycles.
Budi Darmadi, the ministry’s director general of high-technology-based priority industry, said the investments would also be allocated to the manufacturing of engines and developing new car prototypes and designs. He claimed Suzuki would start construction of its new plant and upgrade its production capacity next year.
“The construction work will take around one year, while the expansion will be completed in around eight months,” he said.
Gunadi Sindhuwinata, the president director of PT Indomobil Sukses Internasional, the authorized distributor and local producer of Suzuki in Indonesia, confirmed the plans, saying his firm was preparing for the expansion projects. However, he declined to disclose details of the plans.
Gunadi said the plant would possibly develop low-cost cars as encouraged by the government.
He added that his firm would also add more local content to its car and motorcycle manufacturing process.
Currently, Suzuki produces between 120,000 and 140,000 cars and 1.2 million motorcycles in Indonesia annually, of which 15 to 20 percent is exported.
The large size of Indonesia’s car market has attracted major car makers to increase investments in the country.
Recently, PT Toyota Motor Manufacturing Indonesia (TMMIN), a joint venture between Astra International and Toyota Motor Corporation, unveiled plans to invest Rp 1.7 trillion ($197.2 million) next year to boost production capacity at one of the firm’s three factories.
Carmaker PT Astra Daihatsu Motor (ADM) also started construction of a new factory at the Suryacipta industrial estate in East Karawang, West Java, with an anticipated investment of Rp 2.1 trillion.
Earlier this month, German automaker BMW also expressed its commitment to invest around Rp 100 billion in the next two years to enhance its production capacity and strengthen its sales and distribution networks throughout the country.
The Indonesian Automotive Industry Association (Gaikindo) predicted car sales would increase by 11.5 percent to 830,000 cars this year from 744,895 cars last year. (Linda Yulisman/The Jakarta Post)
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