Hino expands RI factory and production to increase sales

The Jakarta Post, Jakarta | Sat, 12/19/2009 1:05 PM

PT Hino Motors Manufacturing Indonesia (HMMI), the local subsidiary of a Japanese commercial vehicle manufacturer, has completed the expansion of its factory in Purwakarta, West Java, through a US$33 million investment.

President of Hino Motors Ltd. in Japan, Yoshio Shirai, said during an inauguration ceremony held on Thursday that the expanded factory would have a production capacity of 35,000 units per annum up from an initial capacity of 10,000 units per year. This makes the plant the largest Hino Motors' production factory outside of Japan.

The expansion project was started in mid-2007 and finished in August this year. The expanded factory, with a total area of over 53,000 square meters and total land area of 120,000 square meters, is now producing light duty trucks for Hino and for Toyota Motors Corp., which owns a 50 percent share of the Japanese automotive manufacturer.

Shirai said he expected to see an increase in the company's sales of commercial vehicles in Indonesia as a result of the increased production capacity in the country.

"Hino Motors Ltd.'s target for overseas market is to see a 20 percent growth in sales, but for Indonesia I think the sales *target* could be more for than that," he said, adding that his company's global sales, excluding the Japanese domestic market, was currently expected to reach 60,000 units by the end of 2009.

Toshiro Mizutani, president director of Hino's unit for distribution, sales and after-sales service PT Hino Motors Sales Indonesia (HMSI), said that the company sold 13,770 commercial vehicles last year and was expecting to see a drop to around 12,000 by the end of 2009 due to the (delayed effects of) the global economic downturn.

HMMI said it was also considering exporting products from the expanded Indonesian production facility to other regional markets.

"We are still studying the possibilities," Shirai said.

HMMI president director Kenji Ohara said the company currently had a 26 percent share of the Indonesian domestic market.

Gunadi Sindhuwinata, president director of automobile and motorcycle assembler PT Indomobil Sukses Internasional said the automotive industry is forecast to be even more lucrative in 2010. Its growth in sales is predicted to reach 10 to 20 percent, alongside the government's aggressive push forward to expand the required infrastructure (especially for toll roads) so that the industry can grow.

He added that the rate of economic growth, predicted to rise to between 5 and 5.5 percent in 2010, also provided the economic foundations for an expected increase in car sales next year.

The Indonesian Automotive Industry Association (Gaikindo) chairman Bambang Trisulo, told The Jakarta Post that he expected car sales to reach between 560,000 and 600,000 units in 2010.

"It depends *partly* on the impact of the latest developments in the Bank Century bailout saga and Dubai World debt problems," he said.

Gaikindo predicts car sales would reach around 475,000 units this year, down from the much higher level of sales in 2008, which reached 603,700 units.

Bambang said that commercial vehicle sales accounted for between 22 and 25 percent of all annual vehicle sales. (adh)