Jakarta. Japanese automotive giant Mitsubishi Motors Corporation, or MMC, has pledged $666 million in additional investment in Indonesia over the next three years as it seeks to expand its manufacturing activities to hybrid and electric vehicles production, the top economic minister said on Tuesday.
"MMC had invested Rp 11.3 trillion ($752.9 million) for all MMC factories in Indonesia by the end of 2021. The target is that MMC will invest around Rp 10 trillion from 2022 to 2025," the Coordinating Minister for Economic Affairs Airlangga Hartarto said in a statement.
The minister made the comment after meeting Mitsubishi Motors Chief Executive Officer (CEO) Takao Kato in Tokyo on Tuesday.
During the meeting, Mitsubishi Motors unveiled a pilot project for its battery electric vehicle (BEV) with four Indonesian companies next year. The project aimed to find a suitable use case for Mitsubishi's Minicab MiEV, similar to the company's L300, a commercial minibus or pickup already popular in Indonesia.
The government welcomed Mitsubishi's plan and promised to provide support for the company.
"The government welcomes MMC's plan to collaborate with Pos Indonesia, Haleyora Power, Gojek, and DHL Supply Chain Indonesia to use Minicab MiEV vehicles commercially," Airlangga said.
The company plans to diversify its products, focusing on producing electromotive vehicles (xEV) such as hybrid, plug-in, and fuel-cell electric vehicles. Beyond 2023, the company would start the xEV initiative with Xpander and Pajero Sport models. Mitsubishi will also produce two new electric vehicle models in 2024.
It established a local manufacturing arm Mitsubishi Motors Krama Yudha Indonesia (MMKI), in 2018 and has made it a key export base for Mitsubishi. The company aimed to increase its export to 72,000 cars this year and 98,000 cars in 2024, compared to 42,000 cars last year.
From Indonesia, Mitsubishi has exported to 39 destinations in Africa, Asia, and South America and is preparing to ship its product to Australia soon.
Indonesia is an essential country for Mitsubishi, whose market is even larger than the company's sales in Japan. Mitsubishi's CEO Takao said apart from increasing its investment in the country, the company would also plan to launch several new vehicle models with various environmentally friendly types.
"Mitsubishi will diversify its products by issuing vehicles with the type of hybrid electric vehicle (HEV) or plug-in hybrid electric vehicle (PHEV), and battery electric vehicle (BEV) to support the Indonesian Government's program to achieve carbon neutrality in 2060," Takao said.
During his meeting with Airlangga, Takao asked the government to provide more incentives for exporting cars from the country. The minister promised to look into the issue.
"Actually, in terms of the amount of tax, Indonesia is no less competitive with other countries, for example, Thailand. However, because there is a large difference in regional taxes, it seems that taxes in Indonesia are higher. This is what we are studying at the central government," Airlangga said.
Minister of Industry Agus Gumiwang Kartasasmita accompanied airlangga at the meeting. Takao was accompanied by MMC Executive Vice President Yoichiro Yatabe, MMC Division General Manager Hiroyuki Egami, and MMC Indonesia Desk Hideki Miya.