Honda to expand bike capacity in Indonesia, eyes growing demand for sportsbikes

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 – its fourth 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 sportsbikes, which are considered to be high-value-added products 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 70km east of the central part of Jakarta. AHJ plans to invest 1,900 billion Indonesian rupiah (approximately Rs 861 crore) 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.

As of December 2014, the first plant has a capacity of 1 million units, the second plant 1 million units, the third plant 2.2 million units and the fourth plant 1.1 million units, making a cumulative total of 5.3 million units. These plants produce the Revo, Blade, SupraX, SupraX Helm-in, Verza, Mega Pro, CB150R, CBR150R, BeAT, Spacy, Scoopy, Vario110, VarioTechno 125 models and are sold through 1,817 dealership locations.

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.