Toyota Turns Focus From Thailand to Indonesia

Toyota reportedly is mulling an expansion of its production capacity in Indonesia amid the continuing political uncertainty in Thailand.

Indonesian Industry Minister M.S. Hidayat tells the Jakarta Post the plan is in line with Toyota’s long-term aim to make Indonesia its regional production hub.

“I requested Toyota increase production capacity by 20%,” Hidayat says after meeting executives from Toyota Astra Motor (TAM), its Indonesian marketing arm.

Toyota, through Toyota Motor Mfg. Indonesia (TMMIN), has four plants in Indonesia with a production capacity of 250,000 units a year. It is building an engine plant due to be completed in early 2016.

Toyota gradually is shifting some of its production in Thailand to Indonesia and last year began assembly of the Etios Valco hatchback and Vios sedan at TMMIN.

In addition to boosting production in Indonesia, Toyota aims to raise exports from the country, Hidayat says.

Analysts believe that as a result of last month’s Thai military coup, Indonesia could be the next choice for automakers to build new production facilities or upgrade existing plants, the Jakarta Post says.

Newly appointed TAM President Director Hiroyuki Fukui did not confirm the plan to relocate production from Thailand to Indonesia.

He says Toyota first needs to increase exports from Indonesia to 30% of its total production from less than 20% now.

“We discussed (with the minister) export from our plant in Karawang (West Java) and how to increase our exports to 30%,” Fukui says.

Last month, TMMIN said it would triple exports of the locally built Vios to 3,000 units a month by August.

The cars are shipped to Brunei, Singapore, Saudi Arabia, Oman, Kuwait, United Arab Emirates, Qatar and Bahrain.