Jakarta. Honda Prospect Motor, the local car manufacturing unit of Japan's Honda Motor, will invest Rp 4.8 trillion ($360 million) over the next five years in Indonesia to expand its engine, frame and polymer injection production line capacity at its plant in Karawang, West Java.
The company predicts that its engine line production capacity will increase to 300,000 units by 2022, up from the current 225,000, while its frame manufacturing line is expected to churn out 180,000 units per year. Polymer injection production should also increase to 4,200 shots per year from the current 2,800, Tomoki Uchida, Honda Prospect's president director, said on Monday (27/02).
"The expansion of the plant will continue to meet the growing demand for Honda products in Indonesia," Uchida said on the sidelines of an event celebrating the Karawang plant's 1 millionth item produced. The plant, which has been in operation since February 2003, started with a total production capacity of just 50,000 cars per year.
In 2014, Honda Prospect invested Rp 3.1 trillion to establish its second factory, increasing total car production capacity to 200,000 units a year.
In its first year of operation, the company recorded total car sales at just under 22,000. Last year the number rose to 199,364, accounting for 19 percent of Indonesia's car market. Honda's success in Indonesia can be attributed to the introduction of several new car models, such as the Mobilio, BR-V, HR-V, Jazz, Brio Satya, Brio RS and the CR-V.
"With the highest [domestic] market share and the fourth highest sales in the world, Indonesia is one of the most important markets," Uchida said.
The company aims to increase auto-parts exports as well, expecting the numbers to rise to Rp 2.5 trillion this year from Rp 2.2 trillion last year. The target export countries include Thailand, Malaysia, Pakistan, Turkey, the Philippines, Vietnam, Taiwan, Japan, Mexico, Brazil, India and Argentina.
The company's crankshaft factory in Karawang began operation in September 2016 with a production capacity of 240,000 units per year, most of which will enter the market as exports.