Toyota automaker will invest 1.3 trillion in Indonesia

Toyota Motor Corporation (TMC), the largest automaker in Japan, will invest an additional Rp 1.3 trillion (U.S. $ 143 million) in Indonesia to increase capacity in the midst of rising domestic demand, according to an official.

Johnny Darmawan, vice president of Toyota Motor Manufacturing Indonesia PT (TMMIN) - Toyota joint venture with local partners Astra International - said Tuesday that the investment would boost local production capacity of 180,000 units to 230,000 units by the mid-2013.

"With this investment, we can have another 50,000 units from mid-2013, when the improvement of the capacity has been completed," he told The Jakarta Post by telephone, adding that the plant would be better produce new models.

TMC, Akio Toyoda, president announced plans to invest 5.5 trillion rupees at the local level, including Rp 2.9 trillion increase capacity from 110,000 to 180,000 units TMMIN build a new plant.

The plant is currently under construction and set to start operation in late 2012.

TMMIN currently operates three plants in Indonesia: 1 and 2 Sunter Sunter in North Jakarta and Karawang plant in West Java. Toyota Astra Motor (TAM), which is responsible for the distribution and after-sales service for products TMMIN, operates 210 stores across the country.

Johnny, also director Astra president of Toyota Motor (TAM), said the increased investment shows that Toyota wanted to take the risk that the market of Indonesia continued to grow.

"Today, Toyota can not meet all the demand for cars in Indonesia. We are still facing a shortage of supply, although Daihatsu helped us," he said.

PT Astra Daihatsu Motor (ADM) produces, among other vehicles, multipurpose vehicles and SUVs Toyota Avanza fever.

Indonesia, with a growing middle class and a population of 240 million dollars, is a lucrative market for car dealers.

Its economy grew by over 6 percent annually over the past two years, while an increased investment environment has encouraged many car manufacturers to boost investment in the largest economy in Southeast Asia.

Major car manufacturers in Indonesia are waiting for the new government regulations at low cost and environmentally friendly cars, predicting that demand will increase and improve the investment climate through various incentives.

Several car manufacturers have announced commitments last year to increase investment in the country, including Japan Daihatsu Motor Company Ltd., Suzuki Motor Corp. and Nissan Motor Company, BMW of Germany and China Geely Automobile Holdings Ltd.

The Association of the Automotive Industry of Indonesia (Gaikindo) said car sales can increase from 3 to 5 percent this year from 894,180 units sold in 2011 due to increased risks of global economic slowdown and subsidized fuel restrictions in April. TAM has sold 311,136 cars last year, 34.8 percent of auto sales in the country in total.

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