Stock production of cheap and environmentally friendly cars or Low Cost and Green Car (LCGC) now has reached 20 thousand units. Targeted, this year LCGC production could reach 75 thousand units.
“I understand they (the company that produces LCGC) stock has been doing a great market for 20 thousand and 300 thousand could. This year the target can be up to 75 thousand,” said the Minister of Industry (Memperin) MS Hidayat on Inalum after a meeting at the Office of the Coordinating Minister for Economic Affairs, Jakarta , Monday (07/08/2013).
Hidayat said the Indian LCGC production could reach 40 million. Thus, Indonesia should be optimistic to surpass the production of the country.
“Optimistic to 75 thousand units, it could be 40 million units of India you lose the same period India. If it’s cheap-cheap Indian champion, but the quality of Indonesia,” he added.
Furthermore Hidayat said the provision LCGC maximum price Rp95 million per unit still does not include the possibility of adopting new technologies and benchmark transmission problems.
“So the reference price of Rp95 million national reference but there is still space that a standard issue 15 percent transmission and the possibility of adopting a new technology is approximately 10 percent,” he said.
The sweetness of the Indonesian automotive market become a magnet for world-class car manufacturers investments. Companies from Japan, Europe, America and even Korea are competing to build factory in Indonesia to pick up supplies of raw materials and cheap labor and huge market niche.
After decades exist in Indonesia, Suzuki Motor Corp. will infuse money back in large numbers. AFP reported Suzuki plans to invest 100 billion yen, or about Rp 10 trillion for the sake of making Indonesia their production base in Asia.
Small type of vehicle manufacturers that will spend 60 billion yen of which to build a new assembly plant. Previously Suzuki also has plans to invest 40 billion yen to build an engine factory outside Jakarta. The investment plan has been announced since the end of 2012.
With a total investment of 100 billion yen, Suzuki hopes to create a comprehensive network system. Suzuki will enter the passenger vehicle segment lightweight and fuel efficient (low cost green car / LCGC) and held until the beginning of the production process of final assembly in Indonesia. The factory is scheduled to become active in 2014.
With this new plant, the production capacity of Suzuki in Indonesia can be increased from 150 thousand units to 200 thousand units per year. This additional production capacity to accommodate assembly LCGC cars which are expected to dominate the Indonesian market in the coming years.
Moreover, previously, Suzuki has expressed an interest to become one of the LCGC. With the entry in this scheme, Suzuki could get fiscal incentives from the government of Indonesia in the form of tax exemptions.
As is known, the Indonesian government recently issued rules for LCGC incentives. With this scheme, the manufacturer shall make fuel-efficient cars with a price under $ 100 million.
Lately, the existence of a Japanese automotive manufacturer gaining strength in Southeast Asia. This region is considered as one of the key markets for the growth of the middle class is quite large and can provide cheap labor. In Southeast Asia, Suzuki already has a production base of 2.88 million vehicles assemble or half of the global production.