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July 27, 2022

Mitsubishi to expand Indonesia capacity

Plans to produce hybrid and electric vehicles in a new plant

Mitsubishi Motors plans to invest around IDR10trn (US$665m) in Indonesia over the next three years to expand its manufacturing operations, according to a senior government minister.

Airlangga Hartarto, coordinating minister for economic affairs, told reporters during a visit to Japan this week the automaker planned to almost double its cumulative investments in the country between 2022 and 2025, from IDR11trn at the end of 2021, to expand its production capacity.

Mitsubishi CEO Takao Kato said his company planned to produce hybrid and electric vehicles in Indonesia with a new plant expected to be built in one of the industrial parks to the east of the capital city Jakarta. He added the carmaker also planned to more than double its export production capacity to 98,000 vehicles by 2024 from the current 42,000 units.

Local subsidiary PT Mitsubishi Motors Krama Yudha Indonesia produced 144,000 vehicles in 2021, including limited volume for Nissan Motor which discontinued local vehicle production last year. Mitsubishi currently produces the Pajero Sport SUV, Expander MPV/crossover range and L300 light truck at a plant in Bekasi, a satellite city just east of Jakarta.

Airlangga met Mitsubishi executives to discuss potential fiscal incentives for investments and exports.

He said: “Indonesia’s tax rate is actually competitive compared to other countries such as Thailand. However, there are different regional taxes which make taxes seem higher in Indonesia. This is what we are reviewing at the central government.”

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