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6 years ago
UPDATE 1-Toyota says to invest $337 mln in Indonesia expansion
September 13, 2011 / 4:11 AM / 6 years ago

UPDATE 1-Toyota says to invest $337 mln in Indonesia expansion

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(Updates with quote, details)

* Building new vehicles factory with 70,000 per year capacity

* Kijang, Innova among vehicles to be made in new plant

* Capacity at plant to rise to 180,000 units a year by 2013

* Indonesia's car market grew 58 pct last year to 765,000 units

By Chang-Ran Kim

JAKARTA, Sept 13 (Reuters) - Toyota Motor Corp said on Tuesday it would invest a total $337 million in Indonesia, including in building a new 70,000-vehicles-a-year factory in its second move this year to expand in the fast-growing car market.

The world's biggest automaker said the factory would produce vehicles such as its Kijang and Innova, with annual capacity at the new plant rising to 180,000 units by 2013.

Toyota joins a long list of automakers that have announced plans to invest or expand in the world's fourth-most populous country this year, including General Motors Co , Nissan Motor Co and Toyota subsidiary Daihatsu Motor Co .

Last week, China's Geely Automobile Holdings Ltd said it planned to set up a factory in Indonesia by 2015 with an initial capacity of 10,000 vehicles per year and start-up investment of $20 million.

Indonesia's car market grew by a staggering 58 percent last year to a record 765,000 vehicles and is widely expected to top 1 million in the next few years.

Toyota President Akio Toyoda entered the news conference at a ballroom in a Jakarta hotel in an orange Kijang pickup truck, developed in 1977 at the request of the Indonesian government.

"I am confident that the announcement of this second factory will be seen as proof of Toyota's commitment to the Indonesian market," Toyoda told the news conference.

Dominant Position

Toyota has dominated the Indonesian market since getting its start 40 years ago. It cemented its pole position in 1977 with the launch of the Kijang truck.

Toyota took a 38 percent share of the Indonesian market last year, with retail sales of 281,000 vehicles, and expects that to grow to around 300,000 this year.

The Indonesian market is dominated by multi-purpose vehicles (MPVs) such as the Kijang, Innova and Avanza, but the government is keen to create a market for smaller city cars and is expected to outline specifications and other requirements to receive subsidies to produce them in the country in the coming months.

The prospect of growing demand promises more intense competition in the market, where Japanese brands control all but 5 percent of the market.

More than half of Toyota's vehicles so far are produced by Daihatsu, with which Toyota co-developed the best-selling Avanza, sold as Xenia under Daihatsu's badge. Daihatsu also builds Toyota's Rush model under an original equipment manufacturing deal. (Additional reporting by Janeman Latul; Editing by Neil Chatterjee and Muralikumar Anantharaman)

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