BMW to Double Domestic Capacity in Indonesia

Jakarta Globe, Faisal Maliki Baskoro, May 31, 2011

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Luxury carmaker BMW has announced that its local unit will invest Rp 100 billion ($11.7 million) over the next two years to double its production capacity.

Luxury carmaker BMW has announced that its local unit
will invest Rp 100 billion ($11.7 million) over the next two
years to double its production capacity. (JG Photo)

“BMW’s growth in Indonesia has been wonderful,” Graeme Grieve, global vice president of BMW, said in Jakarta at the local unit’s 10th anniversary on Tuesday. “Indonesia’s robust economic growth and promising future are the reasons behind our expansion.”

Grieve said the expansion, scheduled to start in September and finish in March, would double daily automobile output by modernizing the assembly line of partner Gaya Motor, a unit of Astra International.

“Production capacity will increase from four cars per day to eight cars per day,” he said. “In the long term, we expect to have a production capacity of 3,000 units per year.”

After officially launching the convertible 650i and 640i at the anniversary party, Grieve added that the production facility would also begin assembling BMW 5 Series midsize sedans in addition to the 3 Series. The Mini luxury economy car will also arrive in the market by the end of this year.

“With a worldwide sales volume of 230,000 units, the Mini is a leader in the compact premium car market segment,” he said. “We believe the Mini will be very successful here.”

BMW Indonesia’s car sales increased 38 percent last year to 1,500 units from a year earlier, more than double the gain in the broader auto sector. “Sales in Indonesia are relatively small compared to our worldwide sales of 1.5 million units, but we have identified Indonesia as a growing market,” Grieve said.

Ramesh Divyanathan, president director of BMW Indonesia, said the company had seen an average sales increase of 30 percent over the past three years. “BMW’s market share in the luxury car segment also increased to 27.9 percent in the first four months this year from 7.7 percent in the same period last year,” he added.

Car sales in Indonesia are projected to grow by as much as 15 percent to 850,000 units on the back of increasing purchasing power and auto financing.