Honda to Expand Motorcycle Production Capacity in Indonesia

Jakarta, Indonesia – PT Astra Honda Motor (AHJ), Honda’s motorcycle production and sales joint venture company in Indonesia, today announced plans to expand the production capacity of its motorcycle production plant in Karawang (4th plant) by adding a new production line with annual production of 500,000 units. The new production line will be dedicated to the production of sports bikes so that AHJ can realize stable supply to accommodate rapidly growing demand for sports bikes, which are considered to be high-value-added products in Indonesia.

Demand for sports bikes is growing rapidly as consumers diversify their orientation and value system in Indonesia where stable economic growth is continuing. With the addition of the new production line, AHJ will provide good products with speed, affordability and low CO2 emissions and fulfill the demand in the sports bike market where further growth is expected. In this way, Honda will strengthen and establish its presence in the motorcycle market in Indonesia.

The new sports bike production line will be built within the property of AHJ’s existing Karawang Plant in the Bukit Indah Industrial Park, which is located approximately 70 kilometers east of the central part of Jakarta. AHJ plans to invest 1,900 billion Indonesian rupiah (approximately 16.9 billion yen)*to build this new production line and newly hire approximately 1,500 associates to begin production before the end of 2015. With the addition of the new production line with production capacity of 500,000 units, the total production capacity of the Karawang Plant will be increased from the current 1.1 million units to 1.6 million units. The combined annual motorcycle production capacity of AHJ’s four existing plants will increase from 5.3 million units to 5.8 million units before the end of 2015.

Along with this capacity expansion, AHJ will enhance production efficiency and quality through the introduction of the latest production technologies and strive to make this new production line a benchmark for future light sports bike production. In the area of the environment, the new production line will be designed to reduce CO2 emissions and conserve energy through use of natural energy, making it an environmentally-responsible and low carbon production line which is also friendly to associates and the local community.

Indonesia has been the world’s third largest motorcycle market behind India and China, and a further increase in demand is expected. For 2014, industry-wide motorcycle sales in Indonesia are expected to be approximately 8 million units, and AHJ’s sales are expected to exceed 5 million units, breaking the all-time annual sales record. Honda will strive to continue fulfilling the expectations of its customers by providing products that accommodate diversifying customer needs.

* Calculated at the exchange rate of 1 rupiah = 0.0089 yen

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