Toyota plans to increase vehicle production capacity in Indonesia by about a fifth next year, from 100,000 units annually currently.

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PT Toyota Astra Motor sales chief Jodjana Jody told Reuters 2006 domestic sales of 330,000 units from all makers would be a challenging target to meet, as the industry is still suffering from weak purchasing power and
high interest rates.


“We are planning to increase our production capacity next year, maybe by 20%,” Jody told Reuters at a new product launch.


“I think the realistic target for industry sales volume this year is 300,000 units. I would say sales volume of 330,000 units would be a challenging target,” he added.


Reuters noted that Indonesia vehicle sales plunged about half year on year in the first six months of 2006 while industry association Gaikindo predicts sales will only be 370,000-400,000 units this year.

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Gaikindo’s chairman has said that it would be hard for the industry to achieve 350,000 units.


Toyota is the market leader in the overall Indonesian automobile market with around 35% market share while Mitsubishi Motor is second with nearly 14%.


Vehicle sales reached a historic high of 533,910 units last year when interest rates were at a record low, but the government’s decision to raise fuel prices last year sent interest rates up and consumer price inflation to a six-year high, hurting purchasing power and automotive sales, Reuters noted.