Mitsubishi mulls reopening with new models: Govt

Mitsubishi mulls reopening with new models: Govt

The Jakarta Post, Jakarta

Mitsubishi Motors Corp. (MMC) told the government on Wednesday
that it was considering reopening its car-making plant in the
country to produce different models that would more suited to
Indonesian taste, a minister said.

Minister of Industry Andung A. Nitimihardja told reporters
after a meeting in his office with Mitsubishi senior executives
that the Japanese carmaker still considered Indonesia a potential
market for its passenger cars.

"They acknowledge that Indonesia is a potential market,
therefore, they will talk their headquarters into reopening the
plant, but to produce different models," he said, quoting the
Mitsubishi executives.

Among the visiting executives were Motonobu Teramura, senior
vice president and chief representative of Mitsubishi Indonesia,
and Fumio Kawayama, president director of PT Krama Yudha Tiga
Berlian Motors.

The executives, however, declined to comment.

MMC announced on Tuesday it would close PT Krama Yudha Kesuma
Motors manufacturing plant in Indonesia, which produces Kuda
minivan and Galant sedan, in June as it was reorganizing its
global operations as part of restructuring measures.

Mitsubishi's passenger car output in Indonesia has been
declining and the company has been importing cars from its plants
in Thailand.

Andung said Mitsubishi closed its plant because its passenger
cars were overwhelmed by competition from other carmakers such as
Toyota, Daihatsu and Suzuki.

"They were overwhelmed in the passenger cars competition, thus
they will concentrate on the commercial vehicle category," he
said.

Mitsubishi made 4,890 cars at the Indonesian plant last year,
far below its 2000 production figure of over 20,000 units.

According to the ministry, Mitsubishi will lay off some 300
employees at PT Krama Yudha Kesuma Motors. Mitsubishi also has
its commercial vehicle production arm PT Krama Yudha Ratu Motor
here, which employs 1,095 workers.

Andung said Mitsubishi was currently in discussions with the
Ministry of Manpower and Transmigration to settle all labor
matters.

Mitsubishi also told the minister that it would boost its
production of trucks and minibuses to 96,000 units this year.
Last year, it produced 86,839 commercial vehicles or half of
2004's national production.

Vehicle sales in Indonesia reached a total of 483,417 units
last year, 60 percent of which were passenger cars and the rest
commercial vehicles.

The plant closure is in line with MMC product strategies under
its restructuring plan announced earlier this year.

The carmaker is reducing the number of regional models it
produces and putting more resources into globally marketed
models. Reorganization of the Indonesian operations is one of the
business improvement measures outlined in the restructuring plan.

Separately, Japan External Trade Organization (Jetro)
president director Kosuke Imashimizu said Indonesia was still
worth investing in, especially in the grand strategy of Japanese
manufacturers in competing against China.

He said among ASEAN countries, Indonesia should be selected as
the firms' production center, due to its lucrative domestic
market.

"If Indonesia is the production center, then maybe Singapore
will be the design center and Thailand the development center,
where auto parts are developed and tested," he told The Jakarta
Post earlier this week.

However, automobile firms prefer Thailand as the country had
consistent investment policies and provided incentives to
investors, he said, adding that Thailand had long stated its
desire to become the Detroit of ASEAN.

"I wonder if there is an industrial policy in Indonesia," he
said.