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March 2, 2010

INDONESIA: Astra International expands auto operations

Indonesia’s PT Astra International plans to increase capital expenditure by 50% to IDR8 trillion (US$865m) in 2010, to expand its interest in the automotive, mining and infrastructure sectors, according to new president director Prijono Sugiarto.

Indonesia’s PT Astra International plans to increase capital expenditure by 50% to IDR8 trillion (US$865m) in 2010, to expand its interest in the automotive, mining and infrastructure sectors, according to new president director Prijono Sugiarto.

The group, controlled by Singapore’s Jardine Cycle & Carriage, is the largest vehicle distributor in Indonesia with responsibility for key brands such as Toyota, Daihatsu, Isuzu, Peugeot, BMW and Nissan Diesel, automotive component division Astra Otoparts, and motorcycle manufacturer Honda. These operations accounted for around 62% of the group’s IDR98.5 trillion revenue in 2009.

The group also operates in the plantations, mining, infrastructure (toll roads), financial services, banking and insurance sectors.

Astra International wants to participate in the expansion of PT Astra Daihatsu Motor, Indonesia’s largest vehicle manufacturer, in which it has a 32% stake. Johnny Darmawan, marketing director at Astra International, recently said there are plans to increase annual production capacity at Astra Daihatsu Motor by 36% by early 2011, from the current 211,000 units to 286,000 units.

Complete vehicle production at the plant is estimated to have exceeded 220,000 units with overtime last year. More than 9,000 CKD assembly kits were also exported that year. So capacity is currently fully utilised.

Furthermore, Sugiarto suggested that Indonesia’s vehicle market “could grow by up to 15% in 2010 – if there are no issues regarding progressive taxation or luxury tax hikes on cars. The economic situation is improving from the point of view of interest rates, inflation and money supply.”

Astra international also owns 50% in motorcycle producer PT Astra Honda Motor, a joint venture with Japan’s Honda Motor. Annual production capacity is to be increased by 500,000 to 3.5m units.

The group is also in the process of acquiring a coal mine in central Kalimantan through its PT United Tractors subsidiary, the country’s biggest supplier of heavy equipment.

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