GM likely to postpone $60M investment
General Motors Corp. (GM) will likely delay a planned $60 million Indonesian investment this year because of difficulties in securing local components, Asia Pulse reported.
The local component industry is beset by crisis as a result of weak demand from auto makers, PT General Motor Autoworld Indonesia (GMAWI) managing director Mukita Sutikno said.
This situation had become a stumbling block for the subsidiary of GM in carrying out its investment plan, Sutikno said.
He said local content of at least 40% was required for cars to be produced in the country. "It would be difficult to meet the requirement if local industry is facing a problem supplying components."
Earlier, GM Asia Pacific president Nick Reilly said GM would set aside $60 million for investment to produce cars in Indonesia.
So far GM cars sold in Indonesia have been imported in completely built-up form from Thailand and South Korea.
GM already has an assembling facility at Pondok Ungu, Bekasi with a capacity of 20,000 units a year. The factory stopped operation in 2005 because of marketing problems.
The local component industry is beset by crisis as a result of weak demand from auto makers, PT General Motor Autoworld Indonesia (GMAWI) managing director Mukita Sutikno said.
This situation had become a stumbling block for the subsidiary of GM in carrying out its investment plan, Sutikno said.
He said local content of at least 40% was required for cars to be produced in the country. "It would be difficult to meet the requirement if local industry is facing a problem supplying components."
Earlier, GM Asia Pacific president Nick Reilly said GM would set aside $60 million for investment to produce cars in Indonesia.
So far GM cars sold in Indonesia have been imported in completely built-up form from Thailand and South Korea.
GM already has an assembling facility at Pondok Ungu, Bekasi with a capacity of 20,000 units a year. The factory stopped operation in 2005 because of marketing problems.