Mitsubishi Motors revamps production structure in Indonesia

Joint Venture to Construct New Vehicle Assembly Plant in 2017

Mitsubishi Motors Corporation (MMC) and Mitsubishi Corporation (MC) today announced the establishment of a new joint manufacturing company, Mitsubishi Motors Krama Yudha Indonesia (MMKI), with local partner PT Krama Yudha (KY) to construct a new vehicle assembly plant at GIIC Industrial Estate located 37 km east of Jakarta.

The MMC, MC and KY partnership has manufactured and sold motor vehicles in Indonesia since 1970, reaching a cumulative total of 1.3 million units sold (light commercial vehicles and passenger cars) as of the end of 2014. Indonesia has the fourth largest population in the world and further growth in the automobile market is expected as the economy continues to grow. In this context, developing the partnership’s passenger car business in addition to the current light commercial vehicle business has become a necessity in order to effectively respond to the coming demand increase in Indonesia.

The new plant, with a production capacity of 160,000 units per year, will start operations in April 2017. In addition to already locally-produced vehicles such as the COLT L300, a brand-new small MPV (multi-purpose vehicle) model and an all-new Pajero Sport will also be assembled at the new plant. A portion of those vehicles will be exported to other ASEAN countries, and the plant is expected to play a very important role as the second largest production site for MMC vehicles in the ASEAN region, following the Laem Chabang Plant in Thailand. Total investment, including costs for the development of the new models, will be approximately 60 billion yen.

A groundbreaking ceremony for the new plant is scheduled for March 24.

Positioning the ASEAN region as its most important market, MMC has been embarking on a range of new projects under its New Stage 2016 mid-term business plan, including an all-new Triton pick-up truck in Thailand and the construction of a new assembly plant in the Philippines in an effort to achieve sustainable growth and enhance corporate value. Going forward, MMC intends to continue working on new assembly plants and launching new models, as well as restructuring its business in Indonesia. The aim of these strategies is to achieve growth in profits by utilizing ASEAN production capabilities to fill each country’s needs.

MC has been involved in the motor vehicle business in Indonesia for more than 40 years, with activities ranging from production to distribution and auto loan services. As one of the most important markets for its motor vehicle business, MC will draw on its experience in the Indonesian motor vehicle market to strengthen its business foundation through the establishment of this new assembly plant.