Mitsubishi seeks to comply with emission standards

The Jakarta Post, Jakarta

After making its presence felt in the Indonesian automotive market over the last 35 years, Japanese car manufacturer Mitsubishi has now booked a total sales of 1.5 million units, and plans to invest US$50 million in its plants to comply with emission specifications.

"We are proud of our achievement and in our effort to comply with the environmental regulation, we're adjusting our plants to produce engines that comply with the Euro 2 standard," said Fumio, president director of Mitsubishi's Indonesian sole distributor PT Krama Yudha Tiga Berlian Motors (KTB) on Friday.

Following a global move to reduce vehicle emission, Indonesia applied in 2003 the Euro 2 standard, which is deemed safer and environmentally friendly. A resulting ministerial decree stated that it is compulsory for the industry to produce vehicles that comply with the standard as of Jan. 1, 2007.

The company has started investing for the adjustments earlier this year. "We have invested around 50 percent of the total amount and will continue with the rest to meet the 2007 deadline," Kuwayama added.

Despite its success in leading the local market in commercial vehicles, the company still lags behind in marketing its more lucrative passenger cars.

"Out of the 1.5 million units we have sold in thirty years, 50 percent were light commercial vehicles, 42 percent trucks and only 8 percent passenger cars," said KTB marketing director Rizwan Alamsjah.

Its plant in Pulogadung has a yearly production capacity of 120,000 units.

With its large Indonesian market, KTB was able to top the list of sales in the Southeast Asia region, especially for commercial vehicles. "As a comparison, in Thailand we only targeted a sales of 50,000 unit this year," said Kuwayama, adding KTB targeted a 100,000 unit sales here this year.

As of early September, the company reported sales of 76,604 vehicles, dominated by commercial vehicles. Meanwhile, the national car sales figure in the same period stood at 463,865 units.

"Our sales have increased by 14.5 percent as compared to the same period last year," he said. However, with the recent fluctuation in exchange rates and the fuel prices hike, the company predicted a slower growth until the end of the year.

Rizwan said that currently prices of vehicles in the market had risen by Rp 2 million to Rp 6 million.