Indonesia welcomes more vehicle production

Recent announcements by global automakers regarding investments in Indonesia paint a bright picture for the local processing scene given commitments to local sourcing. General Motors (Detroit) is the latest to throw its hubcap into the ring with plans to invest $150 million to restart its assembly operation at Bekasi, West Java, that has been idle since early 2005.

GM reports it will begin assembling seven-seater minivan at the plant in 2013. Initial capacity will be about 40,000 units per year for distribution throughout Southeast Asia. The plant will join a GM manufacturing network with existing plants in Thailand and Vietnam. Among the factors behind the restart are an expanding middle class and improving macroeconomic conditions.

Localization of as many vehicle parts as possible is reportedly an important component of GM's plans for Indonesia. A target of at least 40% has been set for local content.

Toyota Motor (Aichi) is also bullish in developments in Indonesia, announcing in May this year its plan to expand capacity at its Karawang Plant from 100,000 vehicles to 140,000 vehicles by early 2013. Toyota affiliate Daihatsu Motor (Tokyo) is also moving aggressively in Indonesia with plans to complete a new plant in Karawang with capacity of 100,000 units annually and start production by the end of 2012.

Other automakers expressing an interest in local production include Chinese carmaker Geely Automobile Holdings (Hangzhou), with plans to start up an assembly operation in Cikarang in 2015. -[email protected]


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