Mitsubishi to expand Indonesia capacity

Mitsubishi Motors plans to invest about IDR 10 trillion (US$665 million) in Indonesia over the next three years to expand its manufacturing operations, a senior minister said.

Airlangga Hartarto, coordinating economy minister, told reporters during a visit to Japan this week that the automaker planned to nearly double its cumulative investments in the country between 2022 and 2025, from IDR11trn by the end of 2021, to expand its production capacity.

Mitsubishi CEO Takao Kato said his company plans to produce hybrid and electric vehicles in Indonesia with a new factory expected to be built in one of the industrial parks east of the capital Jakarta. He added that the automaker also plans to more than double its export production capacity to 98,000 vehicles from the current 42,000 units by 2024.

Local subsidiary PT Mitsubishi Motors Krama Yudha Indonesia produced 144,000 vehicles in 2021, including a limited volume for Nissan Motor, which stopped local vehicle production last year. Mitsubishi currently produces the Pajero Sport SUV, Expander MPV/crossover range and L300 light truck at a plant in Bekasi, a satellite city just east of Jakarta.

Airlangga met with Mitsubishi executives to discuss potential tax incentives for investment and exports.

He said: “Indonesia’s tax rate is in fact competitive compared to other countries such as Thailand. However, there are several regional taxes that make the taxes in Indonesia seem higher. We are investigating this at the national government.”

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