Bloomberg News

Toyota to Double Capacity, Build New Plant in Indonesia

November 11, 2012

Toyota Motor Corp. (7203), Asia’s biggest carmaker, will build a new engine factory in Indonesia to more than double capacity in the Southeast Asian country as demand surges.

The automaker will boost annual capacity at its first Karawang plant to 130,000 units by September 2013 from 110,000 units, the Toyota City, Japan-based company said in a Nov. 10 statement. The company will have capacity to make 250,000 cars by 2014 after its second Karawang factory opens early next year.

Toyota and related companies plan to invest 13 trillion rupiah ($1.35 billion) in Indonesia during the next five years, boosting employment to about 41,000 from more than 32,000 at present, according to the statement. Expansion in Indonesia comes as the maker of Camry sedans seeks to raise its local procurement rate to offset the impact of the strong yen. Toyota now sources 75 percent of its components locally, according to the statement.

“Toyota has been working with the government, customers and community in Indonesia for more than 40 years and this is why we think the country is very important,” President Akio Toyoda said at a press conference in Jakarta. The Southeast Asian nation is also important because of its large population, stable political situation and economy, he said.

Toyoda also met with President Susilo Bambang Yudhoyono last week. In the meeting, Yudhoyono asked the Japanese carmaker’s support to develop low-cost and green automobiles, Firmansyah, president’s special staff for the economy told Bloomberg News by telephone.

Separately, the company will purchase 150 hectares of land to build a new engine factory, Toyota said in the statement. The automaker will hire 190 workers at the Karawang plant, it said.

Toyota fell 0.5 percent to close at 3,140 yen in Tokyo trading on Nov. 9, paring this year’s gain to 22 percent. The benchmark Nikkei 225 (NKY) Stock Average had risen 3.6 percent this year.

To contact the reporters on this story: Anna Mukai in Tokyo at amukai1@bloomberg.net; Yuki Hagiwara in Tokyo at yhagiwara1@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net


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