Honda invests $140m to expand RI operations<\/p>\n
Rendi A. Witular, The Jakarta Post, Cikarang, West Java<\/p>\n
Motorcycle producer PT Astra Honda Motor (AHM), a local unit of
\nJapan's third largest automaker Honda Motor Co., expanded its
\nIndonesian operations by investing US$140 million in its third
\nmotorcycle plant in Bekasi.<\/p>\n
With the new plant, the production capacity in Indonesia of
\nthe world's biggest motorcycle maker will increase from two
\nmillion units to three million annually, strengthening its
\nposition as the country's largest motorcycle producer.<\/p>\n
The plant, which was officially opened by President Susilo
\nBambang Yudhoyono on Friday, is located on a 30-hectare site at
\nthe MM 2100 industrial estate in Cikarang and employs some 4,000
\nlocal workers.<\/p>\n
Susilo praised the plant and the new investment, which he
\nasserted was a sign of confidence by foreign investors in
\nIndonesia. His government has tried very hard to improve the
\ninvestment climate after it was hit hard by the 1997 financial
\ncrisis.<\/p>\n
\"The government will continue to work on improving the
\ninvestment climate in the country to support higher economic
\ngrowth. Robust investment will also help job creation and mean
\nmore tax revenue for the state,\" he said.<\/p>\n
AHM President Director Minoru Yamashita estimated that the
\ncompany's motorcycle sales would increase by 30 percent this year
\nto 2.6 million units from two million last year, or nearly half
\nof the entire market share.<\/p>\n
Analysts believe that the higher demand is driven primarily by
\nthe cheaper price of motorcycles as well as easier loan
\nfacilities.<\/p>\n
Increasing fuel prices -- by an average of 29 percent on March
\n1 and another raise on Saturday -- has prompted people to switch
\nto motorcycles instead of using cars or poor public
\ntransportation.<\/p>\n
Globally, Honda Motor Co. estimates that motorcycle sales will
\nrise by 16 percent to 12.5 million units through the remainder of
\nthe year with China, India and Southeast Asian countries leading
\nthe growth.<\/p>\n
In Asia, Honda forecasts total sales of 18.3 million
\nmotorcycles this year, 20.53 million next year and 22.4 million
\nin 2007. The production expansion will be focused in Indonesia,
\nIndia, the Philippines and Pakistan.<\/p>\n
The Tokyo-based company also plans to raise its motorcycle
\nproduction capacity in the region, excluding Japan, to 11 million
\nunits next year and 14 million units in 2007, from about eight
\nmillion units last year.<\/p>\n
In Indonesia, the expansion will be carried out by AHM, in
\nwhich Honda Motor and publicly listed PT Astra International have
\nequal 50 percent stakes in the company.<\/p>\n
During the ceremony, Honda also unveiled its plan to introduce
\nnew models, which will be more fuel efficient for countries in
\nthe Association of South East Asian Nations (ASEAN) next year
\nstarting in Thailand.<\/p>\n
Elsewhere, president director of Astra International Michael
\nDharmawan Ruslim said higher fuel prices would likely discourage
\npeople from buying motorcycles. He added the company was still
\ncalculating the impact of the fuel price increase to the demand
\nof motorcycle and cars, as well as reassessing the purchasing
\npower of the people.<\/p>",
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"sponsor": "Okusi Associates",
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