Mitsubishi leads $600 million investment in Indonesia plant, new car
By Yayat Supriyatna and Yoko Kubota
JAKARTA/TOKYO (Reuters) - Mitsubishi Motors Corp (7211.T: Quote) is leading a $600 million investment in Indonesia to build a factory and develop a new car, as the Japanese auto maker seeks to expand in a growing and increasingly competitive auto market.
The pace of auto sales growth in Indonesia has been easing this year as the economy has slowed, but Chief Executive Osamu Masuko said boosting volume in one of the world's most populous countries was crucial for its long-term growth.
"(Indonesia's) population still increases every year, so in the future the Indonesian market will become bigger and bigger," he told reporters in Jakarta.
"This is the most important project for our sustainable growth," he added later, speaking by telephone.
Japan's second-tier car makers, including Mitsubishi Motors - which sells a little over 1 million vehicles globally a year - are betting on growth in Southeast Asia to compensate for shrinking sales in their ageing domestic market.
The region now accounts for a quarter of Mitsubishi Motors' global vehicle sales and Indonesia, with a population of around 240 million people, is the automaker's biggest foreign market.
Mitsubishi's move comes as foreign investment in Indonesia appears to be picking up, fueled by hopes of reform after Joko Widodo was elected president.
Indonesia may also exempt Mitsubishi from some import duties for a period, for example on raw materials, Budi Darmadi, an official at the industry ministry, told Reuters. Continued...