Indonesia Targets Honda Motor’s Exports worth US$1.8 B in 2021
Minister of Industry Airlangga Hartarto took a photo together with the board of directors of PT Honda Prospect Motor on the event "Honda Line Prospect Motor Brio Export Production Line and 20 Year Anniversary Commemoration in Karawang, West Java, on Tuesday (03/26).

JAKARTA (TheInsiderStories) – One of the car maker in Indonesia, PT Honda Prospect Motor (HPM) eyes export with worth of US$1.8 billion in 2021, said the senior officer in a written statement today (03/26). Last year, the automotive company’ export value penetrated up to Rp12 trillion (US$851.06 million).

Since 2013, HPM has exported vehicles in the form of completely knocked down (CKD) for 11 models of four-wheeled motorized vehicles to 12 export destinations in the Asia and American continents.

In addition to being in the form of CKD, PT HPM also exports motorized vehicles in the form of completely built up (CBU), namely Honda Freed which was produced at the Karawang plant in 2011 to 2014 to Thailand and Malaysia.

This year, HPM will first export All New Brio products to the Philippines and Vietnam. The export value reached approximately Rp1 trillion with the value of the domestic content level reaching 89 percent. In Indonesia, Honda Brio sales have reached 280 thousand units, said HPM President Director Takehiro Watanabe.

Minister of Industry Airlangga Hartarto added, this year, HPM committed to invest Rp 4 trillion and the two plants were able to increase the capacity to 200,000 units per year and absorb 6,900 workers. This factory is the 4th largest after the United States, China and Japan.

Chief Operating Officer for Regional Operations (Asia & Oceania) Honda Motor Co., Ltd. Masayuki Igarashi, said Indonesia was an important market for Honda’ business, and had also been a major contributor to Honda’s sales in the Asia and Oceania regions.

“To realize our commitment to the Indonesian market, we have increased investment through the construction of various facilities and produced several models developed specifically for Indonesian consumers,” said the President and CEO of Asian Honda Motor Co., Ltd.

Since founding in 1999, HPM has played an important role in the efforts to develop a national automatic industry capable of global competitiveness.

“This company was born as a form of good and balanced cooperation between PT Honda Prospect Motor and Honda Motor Co., Ltd, and continues to this day,” he said in Karawang, West Java today (03/26).

The minister stated, the government continued to create a conducive business climate in order to encourage the addition of new investments and business expansion in the auto industry sector. With that, it is expected to be able to realize the production target of 1.5 million units by 2020.

He considered, the Indonesian automotive industry had developed into a production base for MPV type vehicles, trucks and pick-ups whose development was directed at increasing exports to the global market with a large target as suppliers of sedan and SUV vehicles.

In addition, with a low emission vehicle (LCEV) development program, its targeted that electric energy-based vehicles can reach around 20 percent by 2025.

He revealed, LCEV-related policies were discussed with the Ministry of Finance in a Consultation Meeting with the Parliament regarding the harmonization of Sales Tax on Luxury Goods to encourage the development of the program.

“Taxes for electric vehicles and sedans under 3000 cc will be made zero percent. Thus, competiveness of sedans and small vehicles will be more competitive while at the same time spurring an increase in production volume,” said the minister.

In addition, the government has prepared proposals for various other incentive facilities that can be utilized in the development of the automotive industry, including tax holidays, tax allowances, Government Borne Import Duty, Import Facility for Export Purpose, and in the near future super deductible tax incentives.

“For companies involved in activities related to innovation or research and development, the government will provide incentives of 300 percent. This package of economic policies will come together with taxes that have been consulted with Parliament,” he explained.

Furthermore, Hartarto said that with the Indonesia-Australia Comprehensive Economic Cooperation Agreement (IA-CEPA), it could open wider market for car exports to the “Kangaroo country” because the there is quite large, up to 1.2-1.5 million vehicles.

The government is aggressively boosting the increase in automotive industry exports to strengthen the structure of the national non-oil and gas economy. Therefore, the government continues to encourage exports of

Written by Daniel Deha, Email: daniel@theinsiderstories.com