Honda Motor’s second plant announced this week for Indonesia will triple its automobile output in the country and meet growing domestic and regional demand.
Through its local subsidiary, PT Honda Prospect Motor, the company plans to expand capacity in the country from the current 60,000 units per year to 180,000 units. It has pledged to invest IDR3.1 trillion (US$340m) in the new facility, which will be built adjacent to its existing plant in Karawang.
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Honda mostly makes the Freed compact MPV at present in Indonesia, with production of the Jazz and CRV still severely disrupted by component shortages from Thailand.
Honda’s sales in Indonesia depend heavily on exports from the company’s plant in Thailand, which is expected to reopen on 26 March following a six-month closure for refurbishment after being flooded last October.
The new 120,000 unit a year facility in Indonesia will make the Brio small car – also made in Thailand and India – with a targeted local content of 80%. The vehicle will be sold locally and exported to other markets in the region.
Domestic demand for small, low-consumption cars is expected to grow sharply from next year as a result of local tax incentives.
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