Posted on 28 Mar 2015
Japan’s fourth-biggest automaker,
Suzuki Motor Corporation, has pledged to invest US$1.3 billion in Indonesia to
expand its automobile and motorcycle businesses in the next three years,
strengthening its capacity to meet higher domestic as well as overseas demand.
Subronto Laras, a commissioner with PT Indomobil Sukses Internasional, Suzuki’s
local partner, said that the funds would be used to build new two-wheeler and
four-wheeler plants, increase local content in its production and develop new
products.
“With this investment, Suzuki will focus more on Indonesia to enhance its
position as its production base,” he told The Jakarta Post on Thursday evening
Japanese companies pledged to invest almost $6 billion during President Joko
“Jokowi” Widodo’s visit to Tokyo earlier this week.
Suzuki pledged about $1.3 billion, Toyota Motor about $1.6 billion, while other
industries, including textiles, steel, fisheries and power pledged combined
investment of about $3 billion.
Construction of the new facilities would enable Suzuki to better compete in the
country’s growing car and motorcycle markets.
Indonesia, where half the country’s population has joined the middle-income
bracket, saw car and motorcycle sales reach 1.2 million and 7.86 million units,
respectively, last year.
Suzuki is the fourth-largest car
seller in the country with sales of 154,923 units last year and is the
third-biggest motorcycle seller with delivery of 275,067 units.
As domestic production surges and allows efficiency, automotive manufacturers
have begun stepping up efforts to make the country an export hub.
Of the figure, around $700 million would be spent to set up a new car plant
with a production capacity of 120,000 vehicles each year, Subronto said,
allowing its existing factory in Tambun, Bekasi, to produce an additional
180,000 units annually. The new plant, to be located in Cikarang, Bekasi, will
manufacture a few brands, including its multi-purpose vehicle (MPV) Ertiga,
low-cost green car (LCGC) Karimun Wagon R and a new low MPV model, which it
will unveil during the upcoming Gaikindo Indonesia International Auto Show
(GIIAS) in August, according to Subronto.
“The bigger capacity will also enable us to boost our exports in the future,”
he said, citing the current annual shipment of between 28,000 and 30,000 units.
Suzuki currently exports the Ertiga to Thailand and Brunei Darussalam and its
Karimun Wagon R to Pakistan.
The plant, which has been undergoing gradual development since early last year,
is slated to partly operate in the second quarter of this year.
The remaining 30 percent of the figure would be earmarked to upgrade the
capacity of its motorcycle plant, develop transmissions locally and relocate
its engine plant from Cakung, East Jakarta, to Cikarang to integrate it with
its planned new automobile plant, Subronto said.
The proposal to upgrade the capacity of its motorcycle plant is still being
studied. Suzuki currently runs a motorbike plant in Tambun with an installed capacity
of 1.5 million units per year. However, the production rate of the plant
currently ranges between 350,000 and 400,000 units.
While the majority of the output is sold in the domestic market, the
two-wheeler maker recently tried to expand its wing overseas.
Earlier this month, Suzuki began exporting automatic scooters to 24 countries
in Europe, Japan, Oceania and Southeast Asia.
