Toyota to invest $1.3 billion in Indonesia over five years

Japan’s Toyota group said Saturday it will invest about 13 trillion rupiah over the next five years in expanding its vehicle production in Indonesia. Toyota Motor Corporation will build a new engine plant in Indonesia and increase the capacity of one of its manufacturing plants in Karawang from 110,000 units to 130,000 a year by September 2013, the carmaker said. A second plant in Karawang was expected to start operating early next year and produce 120,000 cars a year. “We want to send a message to Indonesia that we are committed to expanding our presence from the upstream to the downstream industry,”Toyota chief executive Akio Toyoda said at a press conference in Jakarta. Toyoda and five chief executives of Toyota group companies met Indonesian President Susilo Bambang Yudhoyono to discuss expansion plans. Toyoda said he told Yudhoyono that Indonesia, which enjoys annual economic growth of more than 6 per cent despite a global economic slowdown, would need to improve its infrastructure if it was to attract more investment. Toyota’s new investment was on top of 27 trillion rupiah (2.8 billion dollars) the company has invested over the past 40 years, according to its statement. The expansion would allow the company to increase its workforce from 32,000 to 41,000 over the next five years, the statement said. Toyota’s cars have around 40 % market share in Indonesia. The country’s car sales in Indonesia is expected to reach 1 million units this year, after hitting a record of 894,180 in 2011. The level of car ownership in Indonesia, a country of 240 million people, is still relatively low, with only 11 million cars across the archipelago, according to industry statistics.