General Motors will invest $150m to reopen its Bekasi manufacturing plant in West Java, Indonesia. The plant will start production of a new lines of people moves in 2013 with an initial capacity of up to 40,000 vehicles to serve the Southeast Asian market, according to the company.
The Bekasi plant will join GM Thailand’s Rayong facility and GM Vietnam’s Hanoi plant in Southeast Asia, as GM tries to build market share in a region that is mainly dominated by Asia manufacturers. According to a statement, GM said that it would use the local supply base while spurring the expansion of GM’s local dealer network.
GM Indonesia president director Marcos Purty said that the assembly process would use more than 40% local content, according to the Jakarta Post. He added that the localisation of as many specific vehicle components as possible would be an important part of the firm's future plans.
GM will introduce new vehicle manufacturing equipment and standard processes, including its Global Manufacturing System, the company said. Further details about the product such as its nameplate, design specifications and pricing will be announced at a later date.
GM’s current sales in Indonesia suggest the plant will export a large share of production. Last year, GM’s sales in Indonesia rose 72% to 4,500 units. In the first half of 2011, sales were up another 18% on an annual basis to 2,500 units.
Total sales of new cars in the country reached 750,000 units last year. Sales in the first half of 2011 were 417,687, up 13% from 2010.
“This is one of the most significant undertakings we have made in the region,” said Martin Apfel, president of GM Southeast Asia. “The decision to reopen our Bekasi plant is an extension of GM’s commitment to maintain a strong manufacturing base in Indonesia and Southeast Asia for the production of world-class products that consumers will aspire to buy.”
The manufacturing plant opened in the 1990s, producing Opel cars before it was shut in 2005. Discussions on reactivating the plant started in 2009, when GM said it would be reopened in 2011.
“Today’s announcement offers the strongest possible endorsement of Indonesia’s important role in GM’s global business,” added Purty. “Building and selling great new products in Indonesia will enable us to keep up our growth in this important market. At the same, it will support the growth of the local economy and automotive industry.”
Toyota, which has three factories in Indonesia, has recently announced investment to boost production by 2012 in the country, while the carmaker Daihatsu recently began construction of a new factory in East Karawang, West Java, while the Chinese carmaker Geely is also planning to build a factory in the country to start production in 2015.
