Auto Part Makers Plan to Invest $1.5 Billion in 2014
Several large auto parts makers are expected to spend a combined $1.5 billion in total investment to manufacture automotive products in Indonesia, a high level official at the Industry Ministry said. “The components industry is likely to also receive big investment, following recent investment in [automotive] assembling,” said Budi Darmadi, director general for high-technology industries at the ministry. He said around 20-30 automotive component makers may invest in the country this year.
HPM, the sole distributor of Japanese Honda cars in Indonesia, is expecting the new plant (which saw an investment of $257 million) to boost production of Honda cars to 200,000 units per year from around 80,000 units currently. Karawang, around 75 kilometers east of Jakarta, is home to many manufacturers, including Astra Otoparts, the spare parts unit of the Indonesia’s largest automotive distributor —Astra International. Astra Otoparts and MetalArt of Japan have signed a deal to set up a joint venture that will manufacture auto parts. The partners will spend around $45.3 million and build the plant on 3.2 hectares area in Karawang International Industrial City. Astra Otoparts, which employs over 36,000 people in Indonesia, has been exporting its products to more than 30 countries in regions including Europe, America, Middle East, Asia Oceania and Africa.
Indonesia continued to enjoy strong car sales last year, despite a higher interest rate environment and accelerating inflation. Car sales stood at 1.2 million in 2013, up around 9 percent. Car sales in the country were dominated by big Japanese carmakers, with the top spot occupied by Toyota Motor, followed by Daihatsu Motor and Suzuki Motor.
