Honda to set up 3rd motorcycle plant in Bekasi<\/p>\n
Zakki P. Hakim, The Jakarta Post, Jakarta<\/p>\n
Japan's Honda Motor Co. Ltd. will set up a third motorcycle
\nmanufacturing plant in Indonesia in a joint venture with PT Astra
\nInternational to take advantage of the growing motorcycle market
\nin Indonesia, the world's third largest market, the company
\nannounced on Wednesday.<\/p>\n
The new US$100 million plant, located at MM2100 industrial
\nestate in Cikarang Barat, Bekasi, West Java, will start
\nproduction in October 2005, and have an annual capacity of up to
\n1.2 million units.<\/p>\n
PT Astra Honda Motor (AHM), the joint venture company,
\ncurrently produces 2 million motorcycles from the existing two
\nplants, located in Sunter and Pegangsaan, both in Jakarta.<\/p>\n
AHM president director Minomaru Yamashita said on Wednesday
\nthat Honda was enhancing its production capacity by adding a new
\nplant as the market was expected to grow even more this year.<\/p>\n
\"When the new plant is running at full capacity, Indonesia
\nwill replace India as the biggest Honda motorcycle producer in
\nthe world,\" he was quoted as saying by Antara during a ground-
\nbreaking ceremony.<\/p>\n
India currently produces about 2.3 million motorcycles
\nannually, almost half of the Indian market of 5.5 million units
\nthis year. The biggest market in the world, meanwhile, is China
\nwith a market size of 14 million units this year.<\/p>\n
The motorcycle market in Indonesia reached 3.3 million units
\nin 2003, a 22 percent jump from 2002.<\/p>\n
The local market is expected to grow even more in 2004 to
\nabout 4 million units, according to the Ministry of Industry and
\nTrade.<\/p>\n
Director general of metal, machine, electronics and
\nmiscellaneous industries at the ministry, Soebagyo, said in his
\nspeech: \"The decision (to invest in Indonesia) is a sign that
\ninvestors trust Indonesia as a place where they can expand their
\nbusinesses.\"<\/p>\n
He was hopeful that with the new Honda investment, Indonesia
\ncould become a key base for world motorcycle production.<\/p>\n
The new plant is expected to directly provide new 4,000 jobs
\nand indirectly create more jobs in some 150 local component
\nmanufacturers and suppliers.<\/p>\n
Meanwhile, AHM marketing director Johannes Hermawan said that
\nHonda production here would continue to be focused on the
\ndomestic rather than the export as it would took time before the
\nfirm could fully adopt the Euro II exhaust gas standard required
\nin some export destination countries.<\/p>\n
In 1998, motorcycle sales in Indonesia dropped to 492,626
\nunits from 1.85 million in 1997 as the country felt the pinch of
\nits worst-ever economic crisis. Sales started to recover in 1999
\nwith 587,402 units sold that year. Sales further increased to
\n979,000 motorcycles in 2000, despite the entry of several Chinese
\nbrands into the domestic market.<\/p>\n
Sales eventually moved closer to the pre-crisis level by
\nreaching 1.64 million units in 2001, before soaring to 2.29
\nmillion units in 2002. The availability of cheap bank loans,
\nthanks to the lower interest rate environment, contributed to the
\nstrong sales.<\/p>\n
Prior to the monetary crisis the local market was dominated by
\nJapanese brands Honda, Yamaha, Suzuki and Kawasaki, and Italian
\nbrand Piaggio Vespa. In the late 1990s, cheaper Chinese
\nmotorcycles started to flood the country.<\/p>",
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"sponsor": "Okusi Associates",
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