Nissan to make eco-car, revive Datsun brand

JAKARTA. Japan’s second-largest automaker Nissan Motor Co. Ltd. confirmed on Tuesday that it would produce affordable and eco-friendly cars in Indonesia with its newly pledged investment, and introduce its heritage Datsun brand into the market.

President and chief executive officer Carlos Ghosn said on Tuesday that it aimed to take part in the government-proposed “low-cost green cars” program and tap further into the Indonesian market, which would become its priority in the next few years, in addition to India and Russia, where the brand would also be introduced in 2014.

“As a company deeply committed to sustainable mobility worldwide, Nissan welcomes this plan which is being drafted by the Indonesian government. I reiterate our firm intention to participate in this plan and to contribute to it,” he told reporters during a press conference on the new investment and the global announcement of the return of the Datsun brand in Jakarta.

Ghosn said that through Datsun, Nissan would be committed to provide affordable cars while bringing “a new level of quality and contemporary technology” into the dynamic market of Indonesia.

At present, Nissan, widely known as a pioneer producer of zero-emission vehicles, globally produces cars under two brands: Nissan and Infiniti.

Under the new investment commitment, revealed on Monday by Industry Minister M.S. Hidayat, Nissan plans to pour US$400 million into Indonesia this year, raising its production capacity at its plant in Cikampek, West Java, gradually by 150,000 units to 250,000 units in 2014, with the first 80,000-unit-capacity upgrade to be realized next year.

This will be a continuation of its investment made earlier, through which it doubled the production capacity of its Cikampek plant from 50,000 cars per year at the end of last year with an anticipated investment of $20 million.

Ghosn said that Nissan would focus on and prioritize the domestic market, where demand is expected to further increase in the future.

With the capacity expansion, Nissan is expected to sell 150,000 cars by 2015 and 200,000 cars by 2016 in the country.

To support the target, it would also expand its sales and services network to 150 outlets by 2015.

Last year, Nissan, through its local subsidiary PT Nissan Motor Indonesia (NMI), sold 56,137 units, according to Indonesian Automotive Industry Association (Gaikindo) statistics.

The announcement of Nissan’s new investment came a week after Honda Prospect Motor, a joint venture between Japan’s Honda Motor Co. of Japan and Indonesia’s Prospect Motor, unveiled a similar plan to expand its operation by injecting Rp 3.1 trillion (US$337.9 million), which will be used to build a new auto plant in a bid to triple its current production capacity to 180,000 units amid surging demand for vehicles in the domestic, as well as regional, markets.

The new plant, set to make 120,000 cars per year once it opens in 2014, will produce Honda’s new models which will be the backbone of its future growth, including its compact car, the Honda Brio.

A number of the country’s major carmakers, including Toyota and Daihatsu, earlier announced their facility expansion plan in the country.

Indonesia, the world’s fourth-most populous nation of around 240 million, of which half is an emerging middle class, has emerged as a very lucrative market for cars as well as motorcycles, both key indicators of consumption in Southeast Asia’s largest economy.

Driven by the country’s economy growing at 6.5 percent in the past year, mainly supported by its high domestic consumption, car sales hit a new record high of 894,180 units, up 16.93 percent from 2010, according to Gaikindo.

The government is drafting a new regulation to offer fiscal incentives to support the development of low-cost and green cars. The regulation is expected to be issued in the middle of this year. (Linda Yulisman/ The Jakarta Post)