Honda to invest 5.1 tril. rupiah to boost local car parts procurement in Indonesia

28, Jan. 2020

(Photo courtesy of Honda Motor Co.)
(Photo courtesy of Honda Motor Co.)

JAKARTA, NNA – Major Japanese automaker Honda Motor Co. will spend 5.1 trillion rupiah ($373 million) to boost procurement of local car components and development of new models in Indonesia.

The aggressive spending comes as the company aims to shore up its competitiveness, Yusak Billy, business innovation and sales and marketing director of PT Honda Prospect Motor, its manufacturing and sales unit, said, according to a local report by Bisnis Indonesia.

The outlay does not include investments related to electric vehicles, he added.

In 2019, Indonesia’s new vehicle sales dropped 10.5 percent from a year earlier to 1,030,126 units, according to the Association of Indonesia Automotive Industries (GAIKINDO).

Honda suffered a 15.3 percent year-on-year fall to 137,339 units, with the third-largest market share of 13.3 percent, after Toyota Motor Corp. and Daihatsu Motor Co.

By model, Honda’s Brio compact car series rank second among the top 10 best-selling cars in Southeast Asia’s largest automobile market, while Toyota has four models and Daihatsu two in the top 10, the industry data shows.

Currently, the local procurement ratios are 89 percent for the Brio series, 85 percent for the Mobilio MPV, 83 percent for the BR-V SUV and 45-50 percent for the CR-V SUV, a Honda Prospect Motor official confirmed to NNA.