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Toyota plans to make Indonesia its production base

The plan came as the firm proposes to add $337 million investment for building a new factory in Indonesia.

twitter-logo IANS   Jakarta     Last Updated: September 13, 2011  | 00:00 IST

Toyota Motor Corp plans to make Indonesia, a fast growing car market, its production base, Indonesian Industry Minister M.S. Hidayat said on Tuesday.

The plan came as the firm proposes to add $337 million investment for building a new factory in Indonesia.

Hidayat said products to be made in Indonesia would be exported to other countries.

"They (Toyota) want to make Indonesia as the base of their production for exports," Hidayat said after accompanying Indonesian President Susilo Bambang Yudhoyono with President Director of Toyota Motor Corp Akio Toyoda at the state palace.

Previously Toyota has committed to investing $385 million in Indonesia.

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During the meeting with the president, Akio asked for a new seaport to support the shipments of vehicles, said Hidayat.

"They (Toyota) ask for a seaport facility for shipping products not only to overseas but also to other provinces," he said.

According to Hidayat, the new factory and other projects would be built in Karawang of West Java province and Cikarang and Cibitung of Jakarta and were targeted to start production in 2013.

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President Yudhoyono welcomed the plan and said the government had already included sea ports facilities and roads into the government long-term development plan, according to Johny Darmawan, president director of Astra Motor, who also attended the meeting with the president.

"The president said that it all has been included in the plan, it will build a big sea port," he said.

The director said that Toyota has seen Indonesia as a potential car market. Emerging middle class and growing wealth have partly boosted car demand in Indonesia with a population of over 240 million.

Indonesia's car market has been growing fast. Last year the country's car sales hit a record of 765,000 units, or 58 percent higher than that in the previous year.

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The strengthening of rupiah and moderate interest rate (6.75 percent) have also factored on the hike of car sales in the country, according to an automotive association.

The car sales are forecast to grow to about one million units in coming years.

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