Japanese automakers have pledged to spend at least US$2.9bn in Indonesia in the next few year, according to reports that followed president Joko Widodo’s state visit to Japan.
Toyota Motor, which together with its Daihatsu and Hino subsidiaries controls over 50% of the Indonesian market, has pledged to spend US$1.6bn on increasing capacity and upgrading its factory in Karawang, West Java.
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Toyota plans to triple CKD and CBU exports from up to 200,000 units per year now to 600,000 units. This will help offset any future currency volatility, as well as increase the group’s exposure to low labour costs.
Suzuki Motor is reported to have pledged an initial spend of US$1bn effective immediately, plus a further US$300m in 2017, to expand its car and motorcycle production operations.
Its spending will go into the production of ‘energy-saving’ vehicles with targeted fuel consumption for one litre cars of 34km/litre.
Suzuki’s exports will also be increased from the current 20% of output, or close to 30,000 units a year, to 30%.
President Jokowi promised to offer investment incentives, as well improving transportation infrastructure – particularly to ease congestion in and out of the main ports.
