The Financial Times reports that Toyota is to invest $180m and its suppliers $200m in upgrading its Indonesian factories over the next three years. The company has signed a deal with Astra, its local partner and the country’s biggest carmaker.
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The FT says that the deal is being interpreted as a significant boost for Indonesia, which has been struggling to attract inward investment since the Asian financial crisis of the late 1990s and more recent concerns over political instability.
The FT said that under the terms of the deal Toyota would take 95 per cent control of the manufacturing operations of Toyota Astra Motor (TAM). Astra will also take a majority stake in TAM’s distribution arm, which will be spun off into a new company.
According to the FT, Akio Toyoda, managing director of Toyota’s Asian operations, said Toyota expected to begin manufacturing 70,000 pick-up trucks and multi-purpose vehicles a year in Indonesia by 2004, 10,000 of them for export. The carmaker also wants to manufacture 180,000 petrol engines in Indonesia, 130,000 of which would be for export.
TAM last year assembled almost 85,000 vehicles, 15,000 more than under Toyota’s plans.
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By GlobalDataGaikindo, the Indonesian car assemblers’ association, has said that new vehicle sales in Indonesia jumped 45% in January compared with December to 26,142 units.
