Honda Opens Second Vehicle Plant in Indonesia

PT Honda Prospect Motor opens its second vehicle factory in Indonesia with a production capacity of 120,000 units annually, raising Honda’s potential output in the Southeast Asian country to 200,000 units a year.

The plant, in Karawang, West Java, 47 miles (75 km) east of Jakarta, is producing the Mobilio multi-purpose vehicle with 86% local content as Honda raises the number of local suppliers from 100 to 145.

The 3.1 trillion rupiah ($266.6 million) factory, located alongside the existing plant, covers 1.6 million sq.-ft. (146,000 sq.-m), including the body shop and final assembly, engine assembly and paint lines.

The facility also incorporates stamping, plastic injection molding, plastic-parts painting and quality-assurance operations.

Honda says the location of these functions within the plant is designed to create faster and more-efficient material supply for production.

The facility is designed to be a high-efficiency, low-cost operation, with environment- and worker-friendly systems.

Honda says the second plant will employ 2,000-5,000 new employees, taking its total workforce to 7,500 people at its two facilities.

Honda President and CEO Takanobu Ito, who traveled to Indonesia for the plant opening, says the expansion of business in Indonesia reflects the automaker’s policy to supply products of the highest quality at a reasonable price.

PT Honda Prospect Motor President Director Tomoki Uchida says the new plant is another step toward the company’s target of 300,000 new-vehicle sales annually in Indonesia by 2016.

“In 2014, we are targeting sales of 170,000 units in Indonesia, with 80,000 units expected to be contributed by Honda Mobilio sales,” he says in a statement.

Honda’s delivered a record 91,493 vehicles in Indonesia last year, a gain of 132%. In the process, it increased its market share from 6.2% in 2012 to 7.5%, with the Jazz, CR-V, Civic and CR-Z all segment leaders.