Honda Motor Co.
(
HMC
) plans to open a new car manufacturing plant in Jakarta, Indonesia
by investing 3.1 trillion rupiah ($337 million). The plant, which
will be located in Karawang Industrial Park, will produce small
cars like Brio compact.
The plant will have an annual production capacity of 120,000
vehicles, lifting the company's total production capacity in the
country to 180,000 vehicles per year. The plant will start
operating with a workforce of 2,000 people.
Indonesia has become a manufacturing hot-spot due to its lower
wage structure. As a result, many global automakers including
General Motors Co.
(
GM
),
Nissan Motor Co.
(
NSANY
) and
Toyota Motor Corp.
(
TM
) are planning to expand their operation in the country.
Recently, Honda unveiled its plan to build a scooter factory in
the country, which will boost its annual capacity to 5.3 million
motorcycles. In September last year, Toyota announced its plan to
invest ¥30 billion ($388 million) for building an assembly plant in
the Jakarta suburbs of Karawang in Indonesia.
With the addition of the plant, Toyota's production capacity in
Indonesia will nearly doubled to 200,000 vehicles per year. The
plant will start operations from the first half of 2013 and is
expected to assemble three subcompact models, including a
low-priced strategic vehicle that is under development for the
Indonesian market.
Honda, a Zacks #3 Rank (Hold) stock, reported a 41% decline in
profits to ¥47.6 billion ($613 million) or ¥26.45 (34 cents) per
share in the third quarter of fiscal 2012 ended December 31, 2011
from ¥81.1 billion or ¥45.01 per share in the same quarter of the
prior fiscal year.
Revenues in the quarter dipped 8% to ¥1.9 trillion ($25.0
billion), driven by lower revenues due to disruptions in supply of
parts caused by the earthquake and tsunami in Japan on March 11,
2011 as well as due to floods in Thailand in the second half of
2011, and due to continued appreciation of yen against dollar.
GENERAL MOTORS (
GM
): Free Stock Analysis Report
HONDA MOTOR (
HMC
): Free Stock Analysis Report
NISSAN ADR (
NSANY
): Free Stock Analysis Report
TOYOTA MOTOR CP (
TM
): Free Stock Analysis Report
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