Indonesia's PT Astra Daihatsu Motor (ADM) has invested $US130m this year to expand capacity at its assembly plant in Sunter, in north Jakarta, to 211,000 vehicles per year.

The announcement was made by the company's vice-president director, MR Sudirman, at a ceremony attended by the country's president Susilo Bambang Yudhoyono.

Sudirman said the plant had assembled 155,000 vehicles between January and October, compared with 95,386 units for the whole of 2006. With overtime it can make 250,000 units per year, he added, with the main assembly line now producing a vehicle every 22 minutes, compared with 90 minutes previously. By the end of 2007, the plant is expected to employ 8,250 workers.

This makes it Indonesia's largest vehicle plant - ahead of parent Toyota Motor's Kijang Innova plant in Karawang, east of Jakarta.

The expansion is mostly in response to the sharp rebound in domestic vehicle demand this year - with volumes rising by more than 36% between January and September to 318,220 units. It also reflects a major shift in demand towards compact MPVs such as the Daihatsu Xenia and the Toyota Avanza derivative - which is now the country's best-selling model.

Product quality has improved significantly at the plant and among key parts suppliers in Indonesia, which has allowed Daihatsu to expand its export business from Indonesia.

Around 16% of this year's production to date has been exported - to other markets in Asia such as Thailand, the Philippines and Malaysia; to markets in the Middle East and as far away as Mexico, Venezuela and South Africa. The main export models were the Toyota Avanza and Rush, based on the Daihatsu Terios compact SUV.

Sudirman said local content is currently at 75%, with some key parts still imported from Japan, but the company is aiming to increase the local parts ratio to 85% by the end of 2008.

Tony Pugliese