Toyota to inject $180m into Astra

Arya Abhiseka, The Jakarta Post, Jakarta

The world's third largest automaker, Toyota Motor Corp. plans to inject some US$180 million into its Indonesian manufacturing joint venture company with PT Astra International in an effort to increase car exports from Indonesia.

Akio Toyoda, managing director of Toyota Motor said on Thursday that the company planned to increase global production volume and expected the Indonesian operation to contribute.

"We plan to increase the southeast Asian regional exports of multipurpose vehicles (MPVs) from Indonesia to about 10,000 units (next year)," he said at a press conference following an agreement signing ceremony.

He added that other suppliers who took part in the car manufacturing with Astra would also invest a total of $200 million.

Last year, Toyota Astra Motor (TAM) manufactured some 84,747 vehicles. No export data was available.

Toyota Motor signed an MoU with Astra International to separate TAM's distribution and manufacturing operations.

Under the terms of the agreement, the Japanese company will acquire a 46 percent stake in the manufacturing entity, giving Toyota a 95 percent stake, and leaving Astra with only a 5 percent stake. Meanwhile, Astra will maintain its majority stake of 51 percent in the distribution entity and take charge of sales operations in Indonesia.

Meanwhile, Astra confirmed the divestment would help it raise cash for debt repayment. The company has an outstanding debt of $880 million.