Honda Builds 1 Millionth Vehicle in Indonesia

Honda builds its 1 millionth vehicle in Indonesia 14 years after launching production in the Southeast Asian country.

PT Honda Prospect Motor started local production in 2003 with the Honda Stream at its factory in Karawang, West Java. The plant’s production capacity is 80,000 units a year and was joined in 2014 by a second facility with yearly capacity of 120,000 units.

HPM now produces seven models at the two factories: the Mobilio, BR-V, HR-V, Jazz, Brio RS, Brio Satya and CR-V.

The production increase has kept pace with Honda’s growing market in the region’s most populated country with its more than 260 million people.

It sold 22,000 units in 2003 and has seen that grow to 200,000 units last year for a 19% market share.

The Karawang factory also plays an important role in Honda’s global component production. Besides supplying Japan, HPM ships components to neighbors such as Thailand, Malaysia, the Philippines and Vietnam, as well as India and Pakistan. Latin American destinations include Mexico, Brazil and Argentina.

Honda’s component exports from Indonesia last year topped 7,700 containers with parts worth 2.2 trillion rupiah ($164 million). HPM plans to increase this to almost 10,000 containers this year worth more than IR2.5 trillion ($187.1 million).

Honda has boosted its Indonesian production with the opening of a stamping plant making parts such as side panels, roof panels and floor panels. The factory’s advanced manufacturing technology includes an automatic continuous process and robotic system with capacity of 2 million parts a year.

HPM last year opened a IR228 billion ($17.1 million) crankshaft factory with annual capacity of 240,000 crankshafts a year.

Seiji Kuraishi, Honda Motor executive vice president, says Indonesia is Honda’s fourth-largest sales market, trailing only the U.S., China and Japan.

“Indonesia has always been and always will be an important market for Honda,” Kuraishi says in a statement. “We will continue to dedicate ourselves to doing business in Indonesia and the expansion of automobile production capacities with new factories is a testament to that commitment.”