Suzuki To Invest $800 Million in Indonesia

Just the Facts:

• Japan's Suzuki Motor plans to invest $800 million to expand its Indonesian production operations over the next two years.
• Suzuki plans to make Indonesia a major export hub for both cars and motorcycles.
• Central to the export strategy will be a new vehicle assembly plant to be built in West Java by the end of 2012.

JAKARTA, Indonesia — Japan's Suzuki Motor plans to invest $800 million to expand its Indonesian production operations over the next two years, Indonesian Minister for Industry M S Hidayat told local reporters.

The minister suggested that Suzuki will make Indonesia a major export hub for both cars and motorcycles. Central to this strategy will be a new vehicle assembly plant to be built in West Java by the end of 2012.

Vehicle production capacity at PT Suzuki Indomobil Motor, which is 90 percent owned by Suzuki Motor of Japan, will almost double to around 220,000 units per year.

The current assembly plant, located in Bekasi, some 30 miles east of Jakarta, has a production capacity of 120,000 vehicles per year and this, too, will be expanded, the minister suggested.

According to Budi Darmadi, director general of the ministry's automotive department, part of the investment will go toward expanding engine production capacity in Bekasi, as well as a vehicle design and styling center.

The new plant is expected to produce the company's new R3 model for markets across Southeast Asia, including Thailand. Currently, the company exports CKD kits mostly to markets such as Myanmar, Vietnam and the Philippines.

A spokesman at PT Suzuki Indomobil Motor confirmed that Osamu Suzuki, chairman of parent company Suzuki Motor, will be in Jakarta on July 4 to make a formal announcement.

Inside Line says: The R3 also will be assembled in India by Maruti Suzuki.