Auto parts makers eye RI: Govt
The Jakarta Post, Jakarta
Indonesia's promising automotive sales outlook along with the country's positive economic growth and current stable political environment have persuaded some Japanese automotive manufacturers to commit themselves to setting up component plants here, the Ministry of Industry says.
According to the ministry, the pledges were made during industry minister Andung A. Nitimihardja's visit to Nagoya from June 5 to June 10, where the manufacturers said they had noticed improvements in the infrastructure in industrial estates, as well as the investment climate and business licensing procedures in Indonesia.
In a release issued on Friday, the Ministry of Industry said that Suzuki would make Indonesia its worldwide export production base for the APV minivan.
Suzuki -- which has teamed up here with PT Indomobil Sukses Internasional Tbk -- plans to increase its car production from 120,000 units last year to 200,000 units this year.
The Indonesian Automotive Manufacturers Association (Gaikindo) has said it expects to see sales this year increase to 550,000 units compared to last year's 483,000.
To support its manufacturing activities here, Suzuki has brought 30 small- and medium-sized components suppliers to Indonesia to study the possibility of investing here. Suzuki will also build a supporting industrial estate near its plant.
Three Japanese firms visited by Andung -- engine component maker Hamana Parts Industry Co., structural and body parts maker Bellsonica Co. and plastic components maker Sankei -- have all confirmed their interest in investing here, according to the ministry.
In the lucrative motorcycle market -- where five million motorcycles are expected to be sold this year -- Suzuki, Yamaha and Honda had shown interest in increasing production capacity.
The release said, Suzuki would increase its production output from 800,000 units last year to 1.2 million units this year and two million next year, with a corresponding investment of US$200 million.
Yamaha, meanwhile, would open a second plant in January 2006, which would have a production capacity of 600,000 units per annum based on an investment of $80 million.
At least 80 Indonesian workers were currently undergoing training in Japan in preparation for the opening of the new plants.
Motorcycle market leader Honda will open a third, US$100 million plant in October with a production capacity of one million units.
As for motorcycle components manufacturers, they were set to invest $70 million to support Honda's expansion, the release said.