The government will continue to encourage development of the country automotive industry.Jakarta (ANTARA News) - Investors from East Asia are expected to invest US$1.5 billion in automotive component industry in Indonesia next year, an official of the industry ministry said.
"Next year, investment in tire I, II and III of automotive component industry from Japan, China and Taiwan are expected to reach US$1.5 billion in 100 factories," Budi Darmadi, the high technology industry director general said.
Budi said the new investment will increase the number of automotive component factories in Indonesia from 1,400 units to 1,500 units in 2013.
A strong growth has been recorded in investment in automotive component industry in Indonesia, boosted by growing demand for four wheelers in the country, he noted.
The number of automotive component plants has increased from only 900 units four years earlier indicating rapid expansion of automotive market in the country, he said.
The 100 new component factories will produce and supply components for automotive factories including engines, he said.
He said the increase in the investment in the component sector is expected to be followed with more investment in research and development(R&D).
R&D support is important as a car should have a lifespan of at least seven years, he said, adding three to four years are needed for research to turn out a car in new model.
He said the government will continue to encourage development of the country automotive industry.
This year, the country`s car production target is set at 940,000 units up from last year`s production of 894,178 units.
The country`s car production capacity is forecast to rise 59% to 1.43 million units this year from 900,000 units last year.
Five Japanese car makers are expected to complete work in their expansion projects this year, a report said.
The five companies Toyota Motor Co., Suzuki Motor Co. Honda Motor Co. Ltd Daihatsu Motor Co. and Mitsubishi Motors Co. are investing a total of US$2.22 billion for the capacity expansion this year, the report said.
Toyota car maker which has the largest market share in the country plans to invest up to US$534.4 million to increase its capacity by 120,000 units.
The largest investment of US$782.63 million is planned by Suzuki car maker to expand its annual capacity by 100,000 units.
(Uu.AS/H-ASG/A014)
Editor: Priyambodo RH
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