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.