Toyota Motor, which firmly holds the second position among the biggest car makers in the world, has mulled upon spending 30 billion yen ($388 million) in order to build an assembly plant in Indonesia. This plant would be the second plant in Indonesia which would ensure to double-up the local unit’s overall capacity of production by the company. Toyota announced recently that they have decided to build the new plant in the initial months of 2013 with a production capacity of 1,00,000 units every year.
The factory would be laid down in Karawang, West Java, which is located in adjacent with Toyota’s existing factory. The new factory is believed to look after process of assembling three subcompact models that are expected to be in the coming years to take ahead the legacy of the legendary car maker Toyota. Toyota President Akio Toyoda will be announcing the overall plan officially on Sept. 13. The announcement comes close to the heels of his visit to Indonesia to celebrate the exuberant 40 years of Toyota here. The statement regarding his visit was communicated recently by Johnny Darmawan, President Director of Toyota Astra Motor (TAM).
According to reports from sources and media there would be two hatchback models, Toyota Yaris and Toyota Etios Liva, which would be assembled at the second plant. However, this news was not confirmed by any company official. The proposed amount to construct the plant is estimated to be higher than 16.5 billion yen that Toyota previously announced. The cost it would spend to boost production capacity to 1,40,000 vehicles a year in early 2013 from the current 1,00,000 units is expected to be quite high.
“Toyota has [nearly] doubled its investment in the region to capitalize on high demands,” Johnny said. Johnny said that the Indonesian Automotive Industries Association (Gaikindo) was very keen and confident of overtaking Thailand to become Southeast Asia’s biggest market in the next two years. The Toyota group is under the impression that car sales in Indonesia would reach at around 1 million units by 2013 because of the continuous steep in the spending capacity of the buyers in the region. Indonesia sold 7,64,000 units at local level compared to Thailand’s 8,00,000 units last year.
TAM, which outperforms the other car makers by having grabbed 36 percent market share, predicts to sell 2,88,000 to 298,800 units this year. Toyota Astra Motor registered a sales of 1,82,483 units between the time period of January to July, which marked an 8.6 percent increase against the 1,67,921 units sold during the same period last year. Overall car sales as of July were 5,06,687 units, swelling up by 14.5 percent from a year earlier.
Toyota is the latest company to join the league by announcing an expansion plan, following the already communicated plans by rival companies Nissan and Suzuki. Industry Minister of Indonesia, M.S. Hidayat said that Toyota might receive a tax incentive for its investment. ”We will discuss about tax holidays and other possible incentives with Toyota next week when its CEO comes to Indonesia.” Hidayat said.
Thus, Toyota confirms its presence in Indonesia once again, at the time when competitors too, have assembled to make a mark.
