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.