Indonesian auto hub to emerge through Japanese investmentIndonesian auto hub to emerge through Japanese investment

Indonesia's burgeoning auto sector is set to receive an additional boost through the construction of dedicated industrial park. Behind the initiative is Toyota Tsusho (Tokyo), a Japanese trading house already very active in the sector through distribution of plastic compounds sourced from within Indonesia and abroad.

P.T. TT Techno-Park Indonesia will be located 60-km east of central Jakarta in the Kawasan Industri Mitra Karawang (KIM) industrial part and lease land, manufacturing plants and offices to companies active in the auto sector. Operations are slated for start-up in June 2012 and will also encompass clerical support such as accounting, finance and human resources.

Toyota Tsusho will invest 4 billion Yen ($52 million) in the 150,000-square meter park, including construction of a total of six buildings. Two will be completed by June 2012 and subsequent buildings will be completed in phases through to 2014. Furthermore, the local businesses of Toyota Tsusho including logistics companies, engineering companies) will be consolidated into this district in order to enhance the services provided to customers.

One of the key objectives of the plant is to develop the local supply chain for the auto sector and thereby increase the local procurement rates of Japanese automobile manufacturers including Toyota Motor Corporation. Other automakers with operations in Indonesia include Toyota affiliate Daihatsu and Suzuki Motor. Through provision of the dedicated industrial park, Toyota Tsusho aims to reduce the initial investments and risks involved for companies setting up their first facilities in Indonesia and enable them to concentrate on their core business of production.

Automobile production in Indonesia exceeded 700,000 cars in 2010 and this is expected to grow to one million vehicles by 2015. Growth is being spurred by rising income levels in the country of 240 million, as well a small car policy being promoted by the country.-[email protected]