Mitsubishi to restart RI auto plant

Mitsubishi to restart RI auto plant

TOKYO (Reuters): Mitsubishi Motors Corp president Katsuhiko Kawasoe said yesterday that his company plans to restart a stalled automobile plant project in Indonesia following the change of government there.

Mitsubishi Motors had put the project on hold following disturbances in Indonesia, which has been hit by a severe financial crisis in recent months.

The project had been scheduled to start production this summer of a multi-purpose vehicle already being made in Taiwan and the Philippines.

Kawasoe told reporters after a news conference that while the project would not be able to meet this original schedule, he hoped it would begin operations as early as the beginning of next year. This would be earlier than the company had expected after the project was put on hold.

Regarding the recent weakening of the yen, Kawasoe said that while it would produce short-term benefits for his company, these could be offset by negative effects on Southeast Asia and the carmaker's operations there.

He added that because Mitsubishi Motors has factories overseas, a weakening of the yen no longer boosts earnings as much as it did in the past.

"I hope (the weakening of the yen) will be a short-term thing," he said.

Regarding Japan's domestic car sales, he said that while figures so far for June showed that volumes were up more than 10 percent from year-ago levels, he viewed this as merely a return to normalcy following a particularly weak performance in April and May.

He added that the strength was limited largely to recently launched models.

"We expect there is a lot of latent demand, but generally speaking only the new models are selling," he said. He added that he would be monitoring trends closely for the rest of this month and in July.