Fourteen years after it began production, Honda today has a 19% market share in Indonesia where it produces 7 models. The Karawang plant also plays a key role in Honda’s global automobile component export worldwide.
28 Feb 2017 | 3608 Views | By Autocar Pro News Desk
PT Honda Prospect Motor (HPM) has crossed the one million-unit automobile production milestone in Indonesia, 14 years after it began manufacturing operations in the country.
HPM began local automobile production in February 2003 with the Honda Stream at its factory located in Karawang, West Java, Indonesia. The Karawang Factory, built ...
This is an Autocar Pro Plus article. Subscribe to continue reading.
PT Honda Prospect Motor (HPM) has crossed the one million-unit automobile production milestone in Indonesia, 14 years after it began manufacturing operations in the country.
HPM began local automobile production in February 2003 with the Honda Stream at its factory located in Karawang, West Java, Indonesia. The Karawang Factory, built on an area of 512,500 square metres, has with a production capacity of 80,000 units. The second factory was inaugurated in January 2014 with a production capacity of 120,000 units, augmenting total production capacity to 200,000 units per year.
Honda rides demand curve
Over the years, the Japanese carmaker has seen demand grow for its products. In 2003, the company sold around 22,000 units. Since then, sales have risen considerably and Honda recorded 200,000 unit sales in 2016 with a 19% market share in the country. Currently, HPM produces seven models at its two factories, which include the Mobilio, BR-V, HR-V, Jazz, Brio RS, Brio Satya and CR-V.
Indonesia is the best-performing global market for Honda. Sales reached an all-time record of 190,229 units, accounting for 44% of the carmaker’s overall 2016 ASEAN sales. The company attributes the sales increase of 14% over 2015 to its existing model line-up including the HR-V, Brio Satya and Mobilio, along with contribution from the newly-introduced BR-V.
The Karawang Factory currently plays an important role in Honda’s global automobile component export worldwide. Its export destinations include neighbouring ASEAN countries such as Thailand, Malaysia, the Philippines, Vietnam, other Asian countries such as India and Pakistan, as well as Latin American countries, including Mexico, Brazil, and Argentina.
HPM also delivers component parts to Japan. In 2016, Honda’s component export from Indonesia significantly grew and increased the number of containers exported from 5,600 in 2015 to more than 7,700 containers. In 2017, HPM plans to increase the export quantity to nearly 10,000 containers.
Honda further strengthened its production operations with the opening of its stamping factory, which produces automobile component parts such as side panels, roof panels and floor panels. The factory began its operation in May 2016. The factory has implemented advanced production technology, including automatic continuous process and robotic system and has the production capacity of up to 2 million pieces component parts per year for both domestic sales and export.
In September 2016, HPM made an additional 228 billion rupiah investment and started operation of its new factory for crankshafts. Honda employed advanced and environmentally friendly technology and adopted high-precision machines at this new factory to produce maximum of 240,000 crankshafts per year. This crankshaft factory meets regulations enforced by the Indonesian government for Low Cost Green Car (LCGC) models. Currently, HPM has achieved up to 87% local content in its products.
Seiji Kuraishi, executive vice-president of Honda Motor Co, said, "It is a great achievement to arrive at this milestone in just 14 years and follows in Honda Motor Company’s 100 millionth unit of cumulative automobile production worldwide in September last year. Honda sales in Indonesia were ranked in fourth position for Honda globally, behind only US, China and Japan. Indonesia has always been and always will be an important market for Honda. We will continue to dedicate ourselves to doing business in Indonesia and the expansion of automobile production capacities with new factories is a testament to that commitment.”
Also read: Honda records best-ever sales in ASEAN in 2016