Chinas manufacturers to expand in Indonesia

JAKARTA: Several multinational companies in Liuzhou City, Guangxi Province, China, are eager to expand their business penetration by establishing automotive plants and construction equipment in Indonesia in the next 2 years.Such business penetration
News Editor
News Editor - Bisnis.com 20 Juli 2011  |  05:49 WIB

JAKARTA: Several multinational companies in Liuzhou City, Guangxi Province, China, are eager to expand their business penetration by establishing automotive plants and construction equipment in Indonesia in the next 2 years.Such business penetration is part of promotion program brought by Chinese Government to boost the countrys industry to expand into several important regions in Asia, Director General of Liuzhou City Trade Commission Gu Zhangwei said.Indonesia is one of important countries in ASEAN region for its automotive sector and construction equipment since its potential market is still very large.Besides that, the establishment of plant in Indonesia will strengthen Chinas automotive industrial link in Asia.Liuzhou Local Government is very interested with Indonesias automotive market. Several major companies in Liuzhou are interested with the market segment of truck, commercial and passenger multipurpose vehicle (MPV), SUV and small vehicle.We already have several local brands with strong market. Hence, the plan to invest outside the country becomes a new option and its fixed, he said after attending China-Asean Exposition in Liuzhou on December 8-10, 2011.Currently, there are 11 integrated automotive manufacturers, 400 600 large scale component companies and more than 1,000 small scale companies in Liuzhou.Those largest companies are Dongfeng Liuzhou Motor Co Ltd, a manufacturer of trailer truck, commercial and passenger vehicle and the brand holder of Dongfeng Chenglong, Dongfeng Balong, Dongfeng Long Truck, and Dongfeng Fengxing, and SGMW, a joint venture between SAIC Motor Co Ltd, Liuzhou Wuling Motors Co Ltd and General Motors China.SGMW has dominated 40% of Chinas market in small vehicle segment for five consecutive years.Liuzhou Wuling Automobile Industry Co Ltd is also plan to assess its business expansion. The company, which has core businesses in the segment of truck, minibus, special machinery and components, is currently formulating a global investment.Global projectLiuzhou Local Government prepares US$8 billion for global project, which is divided into 16 projects.Such funds are prepared to grab additional revenue of US$20 billion per annum from its current achievement of US$4 billionUS$5 billion per annum.In heavy equipment sector, there is Guangxi LiuGong Machinery Co Ltd as the brand holder of Liugong and manufacturer of wheel loaders, hydraulic excavator, motor graders, crane, forklift truck, highway construction equipment, and concrete machinery.Such products had been exported with accumulated global sales of 56,500 units last year.Liuzhou Local Government will proactively arrange meetings for Indonesia and Liuzhou businessmen to realize business corporations, Chief of the ASEAN Cooperation Division at Liuzhou Trade Commission Gong Guangming said.We are also inviting Indonesian businessmen to invest in automotive and manufacturing sectors. Hopefully, Indonesias trade performance to Liuzhou could rise, he said.Based on the information released by Liuzhous Trade Commission, the citys automotive component export to Indonesia reached US$100 billion per annum while Indonesias component export to the city is only US10 million per annum.China will provide import duty exemption for Indonesias component products from its original 10% tariff. Such facility is given to increase Indonesias export and investment to Liuzhou, which is also in line with the implementation of Asean-China Free Trade Agreement (ACFTA). (T06/NOM)

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Editor : Muhammad Fariz Aulia

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