Toyota, the highest selling car manufacturing company in the world has announced on 24th of July, 2013 that the company would invest an whopping amount of Rp 2.3 trillion (equivalent to $230 million) to build a new engine manufacturing factory in Karawang, West Java.
This new engine factory will be built by the Japanese’s car major’s subsidiary PT Toyota Motor Manufacturing Indonesia on a plot of 150 hectare that is located near the company’s current car manufacturing facility in Karawang. According to the company’s statement, the engine plant will have the capacity to produce 216,000 units per year out of which around 50 percent will be exported.
This upcoming motor plant will produce engines for all the cars apart from the Innovative International Multi-purpose Vehicle series comprising Kijang Innova, Hilux and Fortuner. The plant is expected to get operational by the first half of 2016.
Currently, Toyota manufactures around 195,000 car motors per year for the IMV series at the existing plants in Sunter, North Jakarta.
As part of Toyota’s expansion plans in Indonesia as an export hub, the Japanese car major has started the operation of its Rp 3.3 trillion car factory in Karawang in March this year that has the capacity to deliver of 70,000 vehicles per year, increasing the company’s overall car production capacity to 180,000 units.
Toyota is targeting to reach a production capacity of 250,000 vehicles annually by next year. In the beginning the factory will produce Toyota’s Etios Valco, and later contemplates to pump up this capacity to 120,000 vehicles per year in the year 2014.
At present, Toyota exports cars, motors and other car components from Indonesia to various countries in Asia, South America and Middle East.
The auto industry’s sales expectations are is lower in the present financial year as compared to the previous financial year owing to the new government policies, hiked up lending rate and the increase of the minimum down payment for auto purchase.
In Indonesia, the car sales during the months of January to June jumped up by 12.46 percent to 601,952 units that exceeded the previous market forecasts marginally.
According to the auto market experts, that current sales condition of Indonesia might be slow during the second half of this year as well because of the hiked fuel prices and higher auto loan rates following Bank Indonesia’s decision to increase the rates.
These things might lead to poor consumer sentiments and as a result low demands in the car market.
Following Toyota’s example in pumping up its production capacity, its Japanese rival company Honda has an upcoming car manufacturing facility in the Mitrakarawang Industrial Estate, in Karawang. The car factory is expected to be fully operational by the beginning of the year 2014. This plant will have the annual capacity of 120,000 vehicles.
Honda has invested a whopping Rp 3.1 trillion in the construction process of this new car plant in Indonesia through a joint venture between Japan’s Honda Motor Co and Indonesia’s Prospect Motor, in order to triple its existing production capacity.
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Tagged: Toyota Karawang Plant
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