Honda plans to triple its capacity in Indonesia

Honda Motor Corporation is all set to triple its capacity in Indonesia, one of Asia’s fastest-growing economies. The Japanese automaker said that the expansion is aimed at meeting the growing demand within the archipelago and across Asia. “The main reason is that the Indonesian domestic market is getting bigger and bigger,” explained Kenichi Tomiyoshi, president director of the Japan External Trade Organization’s Jakarta office. “The large companies are investing more and so are their suppliers.” Last year, the archipelago attracted a record-high of US$20 billion in foreign direct investments with more and more companies seeking ways to expand their businesses in an economy that has not been adversely affected by the global slowdown. Indonesia’s economy does not rely on exports, but is driven by domestic demand. Last year, the economy grew by 6.5% and experts predict that it would grow by more than 6% this year. Honda’s joint venture in the country, P.T. Honda Prospect Motor, will build a new plant near its existing facility in an industrial site in Jakarta. The new plant will boost annual production capacity from 60,000 to 180,000 vehicles. The company also announced plans to set up a new motorcycle factory with a production capacity of 1.1 million units a year, which will increase the company’s total annual capacity to more than five million motorcycles. “Our operations in Indonesia will take the next step to become more autonomous and play an even more important role for Honda in this region,” said Hiroshi Kobayashi, Honda’s managing officer. “Honda will not only build automobiles in Indonesia to meet the needs of customers here. Indonesia will serve as a key export base for Honda―for both completed vehicles and components.” (March 15, 2012)