Suzuki to build new passenger car plant in Indonesia

Article by Anita Panait, on July 30, 2013

Suzuki Motor Corp. is making a JPY60-billion ($611.4 million) investment to construct a new passenger car plant in Indonesia. Suzuki spokesman Ei Mochizuki told Reuters that the Japanese carmaker is planning to build small cars in Indonesia based on its fuel-efficient 660-cc "Wagon R" mini car. Suzuki is Japan's fourth largest carmaker in terms of sales volume.

According to Mochizuki, the Japanese carmaker will be exchanging the 660 cc engine for powerplants with a bigger displacement. Suzuki currently owns and operates a car plant in the country.

Indonesia recently signed into law a Low Cost Green Car (LCGC) program aimed at promoting small cars, although it is on hold pending review.

Suzuki is one of the Japanese carmakers -- including Toyota Motor Corp. and Honda Motor Co. -- that are mulling using their Japan-only mini car technology to penetrate emerging markets with a fast growing middle class. These emerging markets include Indonesia, which is considered as the fourth most-populous country in the world.

The new JPY60-billion passenger car plant will be built near Jakarta, Indonesia as part of the Japanese carmaker’s plans to meet increasing demand for small cars in Southeast Asia. The new plant will be built just adjacent to a Suzuki Motor engine plant that is currently constructed. Suzuki invested around JPY40 billion to finance the construction of the new engine plant, which is slated to commenced its operations in the fiscal year 2014. The new passenger car plant that will be built beside it will be operations in the next fiscal year.

These two new Suzuki Motor plants near Jakarta will combine to become the carmaker’s second facility in the country featuring an integrated production system that delivers already finished products. Once both plants become operational, they are expected to increase the annual production of the Japanese company in Indonesia to more than 200,000 vehicles. Currently, Suzuki Motor produces between 140,000 units and 150,000 every year. Only three types of auto -- including a compact minivan – are being in Indonesia by Suzuki Motor.

When the new facility near Jakarta is finished, its capacity will be used to build a variation of its staple Wagon R mini-car as powered by a 1,000-cc engine. Suzuki plans to produce other types of vehicles at its new Indonesian plant to meet increasing demand for a wider range of vehicles in Southeast Asia.

Based in Minami-ku, Hamamatsu, Suzuki Motor Corp. is a Japanese multinational corporation that produces automobiles, four-wheel drive vehicles, all-terrain vehicles (ATVs) and motorcycles. It also produces outboard marine engines and other small internal combustion engines.

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Topics: suzuki, indonesia, plant

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