Toyota Tsusho To Help Autoparts Firms Move Into Indonesia
Nagoya, Nikkei - 10/08/2011
Toyota Tsusho Corp. (8015) will help small and midsize autoparts suppliers set up production in Indonesia, establishing a local unit next month to oversee the effort.
The unit will secure 150,000 sq. meters of land on the outskirts of Jakarta, near the factories of such Japanese automakers as Toyota Motor Corp. (7203) and Daihatsu Motor Co. (7262), according to Toyota Tsusho's announcement Tuesday. Plans call for constructing six buildings there and leasing them to Japanese clients. The total investment is estimated at 4 billion yen.
In addition to moving its own distribution functions to the industrial park, Toyota Tsusho will handle accounting and other administrative work on behalf of clients.
Five firms are expected to take part in the first round with an aim to begin Indonesian operations in June 2012. As many as 20 clients may eventually sign on by 2014. Toyota Tsusho intends to provide support to autoparts firms that are not affiliated with Toyota as well, in light of growing demand for locally procured parts by Japanese automakers.
Automobile production is growing rapidly in Indonesia. But for small and midsize autoparts firms, moving into a foreign country requires a large initial investment in land and buildings, on top of administrative expenses. Toyota Tsusho will help these companies enter Indonesia, as it already does in China, India and Thailand, with an eye on launching similar services in other emerging markets.