Suzuki Motor and Daihatsu have both joined the ranks of Japanese manufacturers expanding in Indonesia, with both announcing plans for new or expanded production in the country. Suzuki plans to open a new passenger car plant, while Daihatsu will increase add a new line at an engine plant.
Reuters reported that a Suzuki spokesperson has confirmed that the carmaker will build a $611m assembly plant to manufacture its 660cc mini car. The company has yet to confirm detail on location or when the plant is schedule to open.
Daihatsu, a Toyota affiliate, has also announced plans to strengthen engine production at its engine and component plant in Karawang, near Jakarta. The plant will add a new line, transferring production between now and 2015. While the new line will have capacity for 200,000 enginers, overall production capacity will not increase and will remain at 530,000 engines per year.
The expansion plans follow recent news that Toyota will also build a second engine plant in Indonesia in Karawang, with plans to export as well.
Indonesia, with a population of around 240m, has the potential to be one of Asia’s largest automotive markets, and also provide free trade access to the ten-nation ASEAN bloc. According to Gaikindo, the country’s automotive manufacturers association, sales of passenger vehicles, trucks and buses rose 12.4% in the first six months of this year to nearly 602,000 units. Vehicle sales, which reached 1.1m units last year, are expected to hit the 2m mark by 2018.
However, analysts have pointed out that the country’s poor infrastructure and logistics could be a hindrance to the country’s growth.