Toyota exports Fortuners to Middle East

Ika Krismantari, The Jakarta Post, Jakarta

In a sign of the strengthening of Indonesia's position as a Toyota global production base, PT Toyota Motor Manufacturing Indonesia (TMMIN) announced Monday that it would export the automaker's latest model, the Fortuner, to the Middle East and expand the export volumes and destinations of the Avanza in 2007.

TMMIN is planning to export approximately 10,000 Fortuners annually to countries in the Middle East, including Saudi Arabia, said president director Hidemitsu Ibaragi.

With the planned exports, TMMIN will overtake Toyota Motor Thailand, which is currently the only supplier of Fortuner cars to the Middle East markets.

"We have positioned Indonesia as our main global production base to supply Multi Purpose Vehicles (MPV) on the global market," Toyota Motor Asia Pacific senior vice president S. Takayanagi said during an event to mark the sending off of the first export shipment, which was also attended by Industry Minister Fahmi Idris.

The Toyota Fortuner is the latest Toyota MPV, and has been developed as a part of the company's innovative international MPV project.

TMMIN began the production of Fortuners last September with an initial investment of Rp 48 billion (US$5.2 million)

"The local production of the Fortuner is not only aimed at meeting the demand from local buyers, but also to meet overseas demand," Takayanagi explained.

He said the company would also expand the export destinations of the Toyota Avanza, a small engine MPV developed in cooperation with Daihatsu, to 18 more countries in Asia, the Middle East, Latin America and Africa.

"With this expansion, the export volume of Avanza cars is expected to reach 22,000 cars a year," Ibaragi said.

This represents a major increase compared to export volumes in 2006 and 2005, which only amounted to 9,500 units and 1,758 units respectively.

The company's first exports started with the well-known Kijang model in 1987. Since 2004, Toyota's exports from Indonesia have recorded substantial growth, boosted by the exports of Toyota's global models, the Kijang Innova and the Avanza.

In 2004, TMMIN started to export Innovas to Southeast Asia and Middle Eastern countries. In the same year, the company also began to export Avanzas to Thailand and Brunei.

Although the cars are mostly exported in completely built-up (CBU) form, some are also shipped in completely knocked-down (CKD) form as kits.

TMMIN expects the total export value for both the CBU and CKD units to increase to $952 million next year from about $800 million in 2006 and $672 million in 2005.

Industry Minister Fahmi Idris expressed his support for the company's plan to make Indonesia its main global production base for the global market.

"It is a rational decision to make Indonesia the global production base, considering that the country has good domestic market demand, coming from its huge population, as well as a lot of skilled human resources," Fahmi said.

Despite a drop in the car sales on the domestic market, Indonesia's CBU car exports increased by 70 percent to 23,825 units between January and October this year from 14,079 units in the same period last year. The export destinations also increased to 23 countries from 19 countries in the same period last year.

The government estimates that total CBU car exports will reach about 30,000 units this year, an increase of 68 percent from the 17,781 units recorded in 2005.

As of the end of October, domestic vehicle sales had dropped by 46 percent to 254,396 units from 474,921 units in the same period last year.