Nissan, Salim Group set up car venture

Nissan, Salim Group set up car venture

TOKYO (AFP): Japan's Nissan Motor Co. Ltd. announced Tuesday
plans to set up a 3.4-billion-yen (US$40 million) car assembly
venture in Indonesia with local group Salim and Japanese trading
house Marubeni Corp.

The new company, based in western Java, will be the Japanese
carmaker's first affiliate in Indonesia, producing Nissan,
Chrysler, Volkswagen and Volvo vehicles on a knockdown basis from
July next year, a statement said.

Nissan said the new plant, to be built on a 12-hectare (30-
acre) site at Bukit Indah east of Jakarta, would join its mutual
parts supply system in other members of the Association of
Southeast Asian Nations (ASEAN).

Production capacity is estimated at 12,000 units a year, of
which 8,000 will be various Nissan models including the
Pathfinder multi-purpose vehicle. The remaining 4,000 units will
cover various Chrysler, Volkswagen and Volvo models.

Nissan will hold 35 percent of the new company, to be known as
PT Ismac Nissan Manufacturing and initially capitalized at 1.7
billion yen. The Salim group's Indomobil will hold 55 percent and
Marubeni 10 percent.

Japan's second-biggest carmaker has until now contracted its
Indonesian vehicle assembly to PT Ismac, a unit of Indomobil.

But Ismac, which also assembles for other carmakers, has
reached the upper limit of its production capacity of 7,200 units
a year and will close its existing plant and cease operations
once the new venture starts.

The Japanese carmaker said vehicle demand in Indonesia was
expected to jump from 320,000 units last year to 500,000 units in
2000, supported by the country's high rate of growth and its
population of 190 million people.

"With the construction of this new plant, Nissan aims to
strengthen the foundations of its business operations in the
Indonesian market.

"In addition, it will give Nissan a production base in every
major ASEAN market, and is expected to further expand the
company's system of mutual parts supply among its production
centers under the brand-to-brand complementation scheme in effect
in the ASEAN region," the statement said.

ASEAN groups Brunei, Indonesia, Malaysia, the Philippines,
Singapore and Thailand.