Honda engine plant goes on stream in RI

JAKARTA (JP): Japan's Honda Motor Ltd. launched its first assembly plant in Indonesia yesterday to consolidate its lead in the local market.

The US$2.02 million Honda Engine Multipurpose plant in the Indotaisei Industrial District, Karawang, West Java, has an initial capacity to produce 100,000 engines, generators and water pumps under the brand name Honda GX Engine.

It is operated by PT Sinar Honda Jaya, a joint venture with PT Waja Makmur Mandiri, which had been the sole distributor of Honda engines in Indonesia.

The company's vice president Johnson Putra Lawadinata said Waja Makmur Mandiri controlled 60 percent of the market, put at about 150,000 per year and was growing by 10 percent every year.

"We are preparing our second stage investment now. When it is completed, we can double our capacity," he said.

Company president Katsuhiro Uryu said about 20 percent of the manufacturing components are locally supplied.

The company was working to increase the local content to 40 percent to reduce costs. This would make Indonesia the main supplier of Honda GX Engine products in Southeast Asia.

"By using more local contents we can make savings on transportation costs and lower prices," Uryu said.

Honda's engine prices were currently 10 percent to 15 percent lower than other brands in Indonesia, he said.

The Director General of Basic Metal, Machineries and Chemical Industries, Effendi Sudarsono, after opening the plant said Honda Motor Ltd could ask its suppliers to relocate to Indonesia and make it their manufacturing base.

PT Waja Makmur Mandiri was chosen by Honda Motor Ltd as its second Southeast Asian plant after Thailand because of its achievement in raising Honda's market share in Indonesia.

Honda engines have been used in various sectors, including construction, industry, fishing and farming. (08)