Business Development Asia LLC
South East Asian Automotive News
ISSUE 5, FEBRUARY 1998
INDONESIA
Hino Motors Ltd., the Japanese automotive manufacturer, is postponing improvements to a truck factory in Indonesia for two to three years. Hino has a JV with the Salim and Sumitomo Groups to manufacture trucks in Indonesia. The expansion of the venture was scaled back after local demand in 1997 fell to less than half the level of the previous year. (January 22nd 1998)
The Indonesian Auto Assembler Association announced that domestic car sales have declined by 70% from January 1997 to January 1998. Only 10,000 total units were sold during January 1998. Layoffs may be needed to counter soaring production costs and low consumer purchasing. The Indonesian Association of Automotive Producers has announced that auto assembly operations would likely halt until March 1998. (February 9th 1998)
Nissan Motor Co. intends to establish a JV engine plant in Indonesia with a local manufacturer and Nissan's Malaysian subsidiary. The plant will be operational by 2000, at a production rate of 40,000 engines per year. The total investment in the plant is scheduled to be US$66m, half of which will be supplied by Nissan. (January 15th 1998)
PT Timor, Indonesia's national car maker, has stated that it will continue to operate despite recent set backs. The company also expects US$690m in credit to be extended by a bank consortium. However, as part of its aid package to Indonesia, the IMF plan stipulates that tax breaks to the national project must be abolished. (January 16th 1998)
PT Toyota-Astra Motor, a JV between Toyota Motor Corp. and PT Astra International, is reducing production. Output will be scaled back to one shift per day from the two shifts presently operating. The JV still plans to open a second plant in Karawang, West Java in March 1998. Production levels have not yet been announced. (January 27th 1998)
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